U.S. Dollar Pulls Back As Traders Focus On Potential De-Escalation In The Middle East: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Moves Lower As Oil Prices Pull Back

U.S. Dollar Index is losing ground as traders focus on the pullback in the oil markets. Oil prices are down by -1% as President Trump said that Iran asked to continue negotiations. He added that the ceasefire between U.S. and Iran was over.

In case U.S. Dollar Index settles below the 100.75 level, it will head towards the nearest support, which is located in the 100.50 – 100.65 range. On the upside, a move above the 50 MA at 100.99 will push U.S. Dollar Index towards the resistance at 101.15 – 101.30.

EUR/USD Attempts To Settle Above 1.1435

EUR/USD remained stuck near resistance at 1.1420  – 1.1435 as traders reacted to geopolitical news. There are no important economic reports scheduled to be released in the EU today, so traders will stay focused on general market sentiment.

In case EUR/USD settles above the 1.1435 level, it will head towards the resistance level, which is located in the 1.1500 – 1.1515 range. On the support side, a move below the 1.1420 level will open the way to the test of the support at 1.1350 – 1.1365.

GBP/USD Gains Ground As Traders React To Recent Developments In The Middle East

GBP/USD is moving higher as traders bet that the situation in the Middle East will calm down. In absence of economic reports, geopolitical developments serve as the key catalyst for GBP/USD. In case U.S. and Iran restart negotiations and do not attack each other, demand for risk assets will increase, providing additional support to the British pound.

The nearest resistance level for GBP/USD is located in the 1.3450 – 1.3465 range. If GBP/USD manages to settle above the 1.3465 level, it will head towards the next resistance level, which is located in the 1.3535 – 1.3550 range.

On the support side, GBP/USD needs to settle below the 1.3400 level to have a chance to gain downside momentum in the near term. A move below 1.3400 will push GBP/USD towards the support level at 1.3335 – 1.3350.

USD/CAD Tests Support At 1.4125 – 1.4140

USD/CAD is losing ground as traders react to economic reports from Canada. Unemployment Rate declined from 6.6% in May to 6.5% in June, compared to analyst forecast of 6.6%. Participation Rate remained unchanged at 65%, while analysts expected that it would increase to 65.2%.

Traders also focused on the dynamics of precious metals markets. Gold and silver are losing some ground today, but these moves did not put any pressure on the Canadian currency. Other commodity-related currencies are moving higher in today’s trading session.

Currently, USD/CAD is trying to settle below the support level at 1.4125 – 1.4140. In case this attempt is successful, USD/CAD will move towards the next support level at 1.4010 – 1.4025. RSI remains in the moderate territory, so there is plenty of room to gain additional downside momentum in the near term.

On the upside, USD/CAD needs to settle back above the 50 MA at 1.4193 to have a chance to gain sustainable upside momentum. In this case, USD/CAD will get to the test of the resistance level at 1.4225 – 1.4240. This resistance level has been tested many times and proved its strength.

USD/JPY Retreats As Traders Take Profits Near Multi-Decade Highs

USD/JPY pulled back as traders focused on potential de-escalation in the Middle East. Treasury yields moved higher, but this move did not provide support to USD/JPY. It looks that USD/JPY needs additional positive catalysts to test new highs.

In case USD/JPY manages to settle below the support level at 161.50 – 162.00, it will head towards the next support, which is located in the 158.00 – 158.50 range.

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