U.S. Dollar Moves Lower As Traders Stay Focused On The War In The Middle East: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Moves Away From Recent Highs

U.S. Dollar Index pulled back as traders focused on geopolitical developments and reacted to the Existing Home Sales report.

The report indicated that Existing Home Sales increased by +1.7% month-over-month in February, compared to analyst forecast of -0.8%.

The war in the Middle East continued, while oil prices were mostly flat in volatile trading. Treasury yields gained some ground, but this move did not have a material impact on forex market dynamics.

Currently, U.S. Dollar Index is trying to settle below the 50 MA at 98.72. In case this attempt is successful, U.S. Dollar Index will move towards the nearest support level, which is located in the 98.00 – 98.15 range.

EUR/USD Tests The 50 MA At 1.1655

EUR/USD gained some ground despite the disappointing Exports report from Germany. The report showed that Germany’s Exports decreased by -2.3% month-over-month in January, compared to analyst consensus of -2%.

If EUR/USD climbs above the 50 MA at 1.1655, it will head towards the nearest resistance at 1.1675 – 1.1690. A move above the 1.1690 level will open the way to the test of the next resistance at 1.1750 – 1.1765.

GBP/USD Gains Ground As Rebound Continues

GBP/USD moved higher as traders focused on general weakness of the American currency and reacted to the BRC Retail Sales Monitor report from the UK.

The report showed that Retail Sales increased by +0.7% year-over-year in February, compared to analyst forecast of +2.4%.

In case GBP/USD manages to settle above the 1.3450 level, it will move towards the resistance level at 1.3500 – 1.3515.

On the support side, the nearest support level for GBP/USD is located in the 1.3400 – 1.3415 range. A move below the 1.3400 level will push GBP/USD towards the next support level, which is located in the 1.3315 – 1.3330 range.

USD/CAD Pulls Back As Gold Climbs Above $5200

USD/CAD moved lower as traders focused on the rally in precious metals markets. Gold climbed above the $5200 level, while silver moved towards the psychologically important $90.00 level.

The dynamics of oil markets did not have a major impact on USD/CAD in today’s trading session. Other commodity-related currencies have also gained ground today.

If USD/CAD settles below the 1.3550 level, it will move towards the support at 1.3485 – 1.3500. RSI is in the moderate territory, so there is enough room to gain momentum in the near term.

USD/JPY Remains Stuck Below Key Resistance Level

USD/JPY was mostly flat as traders focused on economic reports from Japan. The fourth-quarter GDP Growth Rate was +0.3%, in line with analyst estimates. On an annualized basis, GDP was growing at +1.3%, compared to analyst forecast of +1.2%.

The GDP report did not have a material impact on market dynamics as traders remained focused on high oil prices, which will put significant pressure on the Japanese economy.

Today, traders also had a chance to take a look at Japan’s Household Spending report. The report indicated that Household Spending declined by -2.5% month-over-month in January, compared to analyst forecast of -0.8%.

Weak Household Spending shows that the economy needs additional support. Not surprisingly, traders are ready to bet on dovish BoJ.

From the technical point of view, USD/JPY needs to settle above the resistance level at 158.00 – 158.50 to gain additional upside momentum. In this case, USD/JPY will head towards the next resistance at 161.50 – 162.00.

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