U.S. Dollar Pulls Back As Oil Dives 8%: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Retreats As Traders Focus On Geopolitical Developments

U.S. Dollar Index pulls back as traders focus on geopolitical developments.  President Trump said that Iran negotiated with the U.S. He added that the U.S. would not target Iran’s energy infrastructure during the talks.

Demand for safe-haven assets declined as traders reacted to Trump’s comments, which was bearish for the U.S. dollar. It should be noted that Iranian media denied Iran was trying to negotiate a deal.

U.S. Dollar Index found support in the 98.85 – 99.00 range and is heading towards the 99.50 level. In case U.S. Dollar manages to settle above 99.00, it will move towards the next resistance at 99.70 – 99.85.

EUR/USD Moves Higher As Traders React To The Sell-Off In The Oil Markets

EUR/USD gained some ground despite the disappointing Euro Area Consumer Confidence report. The report showed that Euro Area Consumer Confidence decreased from -12.2 in February to -16.3 in March, compared to analyst forecast of -14.4.

EUR/USD made an attempt to settle above the resistance at 1.1585 – 1.1600 but lost momentum and pulled back. If EUR/USD settles below 1.1585, it will move towards the nearest support level, which is located in the 1.1510 – 1.1525 range.

On the upside, EUR/USD needs to settle above the 1.1600 level to have a chance to gain upside momentum in the near term.

GBP/USD Tested New Highs

GBP/USD has also moved higher as traders focused on recent developments in the Middle East.

WTI oil declined below the $92.00 level, while Brent oil pulled back below $104.00 level. Lower oil prices raised demand for risker currencies, including British pound.

From the technical point of view, GBP/USD failed to settle above the resistance level at 1.3400 – 1.3415. In case GBP/USD moves below the 1.3350 level, it will head towards the support at 1.3315 – 1.3330.

USD/CAD Is Mostly Flat In Choppy Trading

USD/CAD was swinging between gains adn lsoses as traders focused on the strong pullback in commodity markets.

Gold prices made an attempt to settle below the $4100 level, while silver prices tested the $61.00 level. Both gold and silver managed to rebound from session lows, but this rebound did not provide material support to commodity-related currencies.

Currently, USD/CAD attempts to settle above the resistance at 1.3720 – 1.3735. In case this attempt is successful, USD/CAD will move towards the next resistance level at 1.3800 – 1.3815.

USD/JPY Pulls Back Amid Falling Treasury Yields

USD/JPY declined from recent highs as traders reacted to the pullback in Treasury yields. The yield of 2-year Treasuries declined below the 3.90% level, which was bearish for USD/JPY.

The strong pullback in the oil markets provided additional support to the Japanese yen. High oil prices put significant pressure on the Japanese economy, which is dependent on energy imports. In this light, any signs of de-escalation in the Middle East are bullish for the Japanese currency.

It should be noted that there are no signs of interventions from the Bank of Japan. At this point, it looks that BoJ is not ready to intervene unless USD/JPY crosses the 160.00 mark.

The nearest support level for USD/JPY is located in the 158.00 – 158.50 range. A successful test of this support will open the way to the test of the next support at 154.50 – 155.00.

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