U.S. Dollar Moves Lower As Treasury Yields Fall: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Remains Under Pressure

U.S. Dollar Index pulls back as traders react to housing market data and focus on recent developments in the Middle East.

Pending Home Sales  increased by +1.8% month-over-month in February, compared to analyst forecast of -0.5%. On a year-over-year basis, Pending Home Sales decreased by -0.8%.

Oil prices were swinging between gains and losses as Israel said that Iran’s top security chief Larijani was killed. At the time of writing, Iran did not confirm his death.

It looks that demand for safe-haven assets has started to decline, which was bearish for the American currency.

Currently, U.S. Dollar Index is trying to settle below the support at 99.70 – 99.85. In case this attempt is successful, U.S. Dollar Index will get to the test of the 50 MA at 99.44. If U.S. Dollar Index declines below the 50 MA, it will move towards the next support level, which is located in the 98.85 – 99.00 range.

EUR/USD Tests New Highs

EUR/USD continues to move higher despite the disappointing Euro Area ZEW Economic Sentiment Index report. The report indicated that Economic Sentiment declined from 39.4 in February to -8.5 in March, compared to analyst forecast of 24. Rising oil and natural gas prices put significant pressure on the Economic Sentiment in the EU.

EUR/USD moved above the resistance at 1.1510 – 1.1525 and made an attempt to settle above the 50 MA at 1.1548. If EUR/USD climbs above the 50 MA, it will head towards the resistance level at 1.1585 – 1.1600.

GBP/USD Tests The 50 MA At 1.3352

GBP/USD tested new highs as traders focused on general weakness of the American currency.

A successful test of the 50 MA at 1.3352 will open the way to the test of the next resistance level, which is located in the 1.3400 – 1.3415 range.

USD/CAD Gains Ground As Gold Pulls Back

USD/CAD moved higher as traders reacted to pullbacks in gold and silver markets. Other commodity-related currencies were mixed in today’s trading session.

The nearest resistance level for USD/CAD is located in the 1.3720 – 1.3735 range. In case USD/CAD climbs above the 1.3735 level, it will move towards the next resistance at 1.3800 – 1.3815. RSI remains in the moderate territory, so there is plenty of room to gain upside momentum in case the right catalysts emerge.

On the support side, a move below the 1.3685 level will push USD/CAD towards the nearest support at 1.3650 – 1.3665. If USD/CAD declines below the 1.3650 level, it will get to the test of the 50 MA at 1.3631.

USD/JPY Moves Lower Amid Falling Treasury Yields

USD/JPY is losing some ground as traders react to dynamics of Treasury yields.

The yield of 2-year Treasuries declined towards the 3.67% level, while the yield of 10-year Treasuries moved below 4.20%. Falling Treasury yields are bearish for USD/JPY.

Traders have already started to prepare for BoJ Interest Rate Decision, which will be released on Thursday. Analysts expect that BoJ will keep the rate unchanged at 0.75%. Traders will also focus on BoJ’s Ueda comments.

Ueda may provide some insights on BoJ’s thinking in the current market environment. Rising energy prices put significant pressure on the Japanese economy, and the market does not believe that BoJ will be able to raise rates.

The nearest support level for USD/JPY is located in the 158.00 – 158.50 range. A move below the 158.00 level will push USD/JPY towards the next support at 154.50 – 155.00.

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