U.S. Dollar Moves Lower As Traders Focus On U.S. – Iran Deal: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Pulled Back As Geopolitical Risks Declined

U.S. Dollar Index attempts to rebound from session lows as traders focus on geopolitical developments and react to the NAHB Housing Market Index report.

Oil prices are down by almost -5% as U.S. and Iran reached a deal that would reopen the Strait of Hormuz this week. The deal raised demand for risk assets and put pressure on safe-haven assets, which was bearish for the American currency.

NAHB Housing Market Index declined from 37 in April to 35 in May, compared to analyst forecast of 36. According to the report, 35% of builders cut prices in June.

The nearest resistance level for U.S. Dollar Index is located in the 99.70 – 99.85 range. A move above the 99.85 level will push U.S. Dollar Index towards the next resistance at 100.50 – 100.65.

On the support side, a move below the 99.40 will open the way to the test of the support at 98.85 – 99.00.

EUR/USD Tests Resistance At 1.1585 – 1.1600

EUR/USD gained ground despite the disappointing Euro Area Industrial Production report. The report indicated that Euro Area Industrial Production increased by +0.1% month-over-month in April, compared to analyst forecast of +0.3%.

Currently, EUR/USD is trying to settle above the resistance level at 1.1585 – 1.1600. In case EUR/USD manages to settle above the 1.1600 level, it will head towards the next resistance, which is located in the 1.1675 – 1.1690 range.

GBP/USD Moves Higher Amid Rising Demand For Risk Assets

GBP/USD moved higher as demand for risk assets increased amid sell-off in the oil markets, which was triggered by the U.S. – Iran deal.

The nearest resistance level for GBP/USD is located in the 1.3450 – 1.3465 range. A move above the 1.3465 level will push GBP/USD towards the next resistance at 1.3535 – 1.3550.

On the support side, GBP/USD needs to settle below the 50 MA at 1.3393 to have a chance to gain upside momentum in the near term. If GBP/USD declines below the 50 MA, it will head towards the support at 1.3335 – 1.3350.

USD/CAD Is Heading Towards The 1.4000 Level

USD/CAD is mostly flat despite the strong rally in precious metals markets. Gold and silver markets gained 3% as traders reacted to U.S. – Iran deal. Other commodity-related currencies are moving higher in today’s trading session.

In case USD/CAD manages to settle above the 1.4000 level, it will head towards the resistance at 1.4035 – 1.4050. A successful test of the resistance at 1.4035 – 1.4050 will open the way to the test of the next resistance level at 1.4125 – 1.4140.

USD/JPY Remains Stuck Near The Key 160.00 Level

USD/JPY stays above the psychologically important 160.00 level despite the pullback in Treasury yields. The yield of 2-year Treasuries declined below the 4.05% level, while the yield of 10-year Treasuries settled near 4.45%.

In case USD/JPY stays above the 160.00 level, it will get to the test of recent highs near the 160.50 level. A move above the 160.50 level will push USD/JPY towards the resistance at 161.50 – 162.00. There are no signs of interventions from the Bank of Japan, but the central bank may decide to provide support to the yen in case USD/JPY gains strong upside momentum.

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