U.S. Dollar Pulls Back From Session Highs As Oil Drops Below $100: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Index Moved Away From Session Highs

U.S. Dollar Index pulled back from session highs as traders reacted to the developments in the oil market.

WTI oil tested the $119 level as the Strait of Hormuz remained closed. Later, oil prices pulled back below the $100 level as traders bet that G7 countries would release oil from reserves to cool prices.

Currently, U.S. Dollar Index is trying to settle back below the support at 98.90 – 99.05. In case this attempt is successful, U.S. Dollar Index will head towards the 50 MA at 98.58. A move below the 50 MA will push U.S. Dollar Index towards the support at 98.00 – 98.15.

EUR/USD Rebounded From Multi-Week Lows

EUR/USD rebounded as traders’ appetite for risk has started to rise. Oil markets pulled back from session highs, providing support to riskier assets.

In the EU, traders focused on economic reports from Germany. Industrial Production decreased by -0.5% month-over-month in January, compared to analyst forecast of +0.9%.

Factory Orders declined by -11.1% on a month-over-month basis, while analysts expected that they would drop by -4.3%.

From the technical point of view, EUR/USD attempts to settle above the resistance at 1.1585 – 1.1600. If EUR/USD manages to settle above the 1.1600 level, it will head towards the next resistance, which is located in the 1.1675 – 1.1690 range.

GBP/USD Tests Resistance At 1.3400 – 1.3415

GBP/USD has also managed to move away from session lows as traders reacted to the developments in the oil markets.

There are no important economic reports scheduled to be released in the UK today so traders will stay focused on general market sentiment and geopolitical news.

In case GBP/USD manages to settle above the resistance at 1.3400 – 1.3415, it will move towards the next resistance level at 1.3500 – 1.3515. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

USD/CAD Gains Some Ground As Traders Ignore The Oil Price Rally

USD/CAD gained some ground despite the strong rally in the oil markets. Other commodity-related currencies moved higher in today’s trading session.

The nearest resistance level for USD/CAD is located in the 1.3585 – 1.3600 range. If USD/CAD climbs above the 1.3600 level, it will head towards the next resistance at 1.3650 – 1.3665.

On the support side, a move below the 1.3550 level will push USD/CAD towards the support level at 1.3485 – 1.3500.

USD/JPY Attempts To Settle Above The 158.50 Level As Traders Bet On Dovish BoJ

USD/JPY made an attempt to settle above the resistance level at 158.00 – 158.50 but lost momentum and pulled back towards the 158.00 level.

Treasury yields pulled back from recent highs, which was bearish for USD/JPY. The yield of 2-year Treasuries declined below the 3.60% level, while the yield of 10-year Treasuries pulled back below 4.15%.

There are no signs of interventions from the BoJ which is not surprising amid war in the Middle East. High energy prices will put additional pressure on the Japanese economy and could force BoJ to keep rates unchanged despite inflation.

From the technical point of view, USD/JPY needs to settle above the resistance at 158.00 – 158.50 to gain additional upside momentum in the near term. If USD/JPY settles above the 158.50 level, it will move towards the resistance level at 161.50 – 162.00.

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