U.S. Dollar Moves Lower As Traders Take Profits Despite Geopolitical Tensions: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Retreats At The Start Of The Week

U.S. Dollar Index pulls back as traders react to economic reports and focus on geopolitical news.

NAHB Housing Market Index increased from 37 (revised from 36) in February to 38 in March, compared to analyst forecast of 37. The report indicated that current sales conditions increased from 41 in February to 42 in March, while traffic of prospective buyers grew from 22 to 25.

Today, traders also had a chance to take a look at the Industrial Production report for February. The report showed that Industrial Production increased by +0.2% month-over-month, compared to analyst consensus of +0.1%.

U.S. Dollar Index failed to settle above the resistance level at 100.35 – 100.50 and pulled back towards the support at 99.70 – 99.85. In case U.S. Dollar Index declines below the 99.70 level, it will move towards the 50 MA at 99.33.

EUR/USD Rebounds From Multi-Week Lows

EUR/USD rebounds from recent lows as traders take some profits off the table after the strong move.

Over the weekend, U.S. and Israel continued to deliver strikes against Iran. In turn, Iran attacked oil-related infrastructure in the region.

Oil prices have moved away from recent highs, but it’s too early to say that demand for safe-haven assets has declined. If investors’ appetite for risks increases, EUR/USD will get more support.

The nearest resistance level for EUR/USD is located in the 1.1510 – 1.1525 range. If EUR/USD manages to settle above the 1.1525 level, it will move towards the 50 MA at 1.1562.

GBP/USD Attempts To Settle Above 1.3300

GBP/USD has also managed to rebound from multi-month lows as traders focused on general weakness of the American currency.

Currently, GBP/USD is trying to settle above the resistance at 1.3315 – 1.3330. If this attempt is successful, GBP/USD will get to the test of the 50 MA at 1.3356. A move above the 50 MA will push GBP/USD towards the next resistance level, which is located in the 1.3400 – 1.3415 range.

USD/CAD Moves Lower As Traders React To Canada’s Inflation Data

USD/CAD pulled back as traders focused on inflation data from Canada. Inflation Rate declined from 2.3% in January to 1.8% in February, compared to analyst forecast of 1.9%.

Core Inflation Rate decreased from 2.6% to 2.3%, while analysts expected that it would decline to 2.4%.

A successful test of the support at 1.3650 – 1.3665 will open the way to the test of the 50 MA at 1.3627. On the upside, USD/CAD needs to settle above the resistance at 1.3720 – 1.3735 to gain upside momentum in the near term.

USD/JPY Pulls Back As Treasury Yields Decline

USD/JPY moved lower as traders focused on the pullback in Treasury yields. The yield of 2-year Treasuries declined below the 3.70% level, while the yield of 10-year Treasuries pulled back below 4.25%.

From a big picture point of view, traders will stay focused on dovish BoJ policy outlook. High oil prices will put significant pressure on Japan’s economy, so BoJ will not be able to raise rates.

It should be noted that there are no signs of interventions from the BoJ, which is not ready to defend the yen at current levels.

USD/JPY settled above the previous resistance at 158.00 – 158.50 and is trying to settle above the 159.50 level. In case this attempt is successful, USD/JPY will head towards the resistance at 161.50 – 162.00.

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