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

U.S. Dollar Moved Lower As Demand For Safe-Haven Assets Declined

U.S. Dollar Index is losing ground as traders focus on the strong pullback in the oil markets and react to ADP Employment Change report.  The report indicated that private businesses added 109,000 jobs in April, exceeding the analyst forecast of 99,000.

Oil prices are down by almost 8% amid reports indicating that U.S. and Iran are moving towards a deal. At this point, falling oil prices are bearish for the American currency as they reduce demand for safe-haven assets.

U.S. Dollar Index managed to rebound from session lows and is trying to settle above the resistance level at 98.00 – 98.15. In case U.S. Dollar Index settles above the 98.15 level, it will head towards the 50 MA at 98.41. A move above the 50 MA will open the way to the test of the next resistance at 98.85 – 99.00.

EUR/USD Tested New Highs As Oil Prices Pulled Back

EUR/USD tested new highs as traders reacted to the strong sell-off in the oil markets. It should be noted that oil prices have moved away from session lows, putting some pressure on EUR/USD.

EUR/USD attempts to settle above the resistance level at 1.1765 – 1.1780. If EUR/USD manages to settle above the 1.1780 level, it will move towards the next resistance level at 1.1850 – 1.1865.

GBP/USD Moved Away From Session Highs Amid Profit-Taking

GBP/USD gained ground as traders focused on general weakness of the American currency. However, GBP/USD failed to settle above the resistance level at 1.3650 – 1.3665 and pulled back towards the support level at 1.3570 – 1.3585.

If GBP/USD declines below the 1.3570 level, it will head towards the 50 MA at 1.3542. A move below the 50 MA will open the way to the test of the next support at 1.3450 – 1.3465. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

USD/CAD Tests Resistance At 1.3620 – 1.3635

USD/CAD is moving higher as traders ignore the rally in precious metals markets. Other commodity-related currencies gained strong upside momentum in today’s trading session.

In Canada, traders had a chance to take a look at Ivey PMI report for April. The report showed that Ivey PMI increased from 49.7 to 57.7, compared to analyst forecast of 49.9. Numbers above 50 show expansion.

Currently, USD/CAD is trying to climb above the resistance level at 1.3620 – 1.3635. If USD/CAD settles above the 1.3635 level, it will move towards the next resistance at 1.3700 – 1.3715.

USD/JPY Attempts To Rebound After BoJ Intervention

USD/JPY pulled back as BoJ intervened to support the yen. USD/JPY was moving towards the 158.00 level, so BoJ decided that it was time for another intervention.

It should be noted that USD/JPY has quickly rebounded from session lows and is moving towards the 156.50 level. The yen remains fundamentally weak, so BoJ may need to intervene again to provide additional support to the yen.

That said, BoJ cannot intervene day after day as the yen will lose its status of a free-floating currency. If BoJ does not push USD/JPY below the 155.00 level in the near term, bulls will boost pressure and push USD/JPY towards higher levels.

If USD/JPY manages to settle back above the 156.50 level, it will head towards the resistance at 158.00 – 158.50.

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