U.S. Dollar Rallies As U.S. Strikes Iran: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

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

U.S. Dollar Index rallied as traders reacted to U.S. and Israel’s military operation against Iran. Traders rushed to buy safe-haven assets amid rising geopolitical risks, and the U.S. dollar benefited from this trend.

Oil prices rallied, providing additional support to the American currency. The U.S. is the leader in the oil production, which is bullish for the U.S. dollar. The currencies of energy importers got hit in today’s trading session.

Today, traders also focused on the ISM Manufacturing PMI report. The report indicated that ISM Manufacturing PMI declined from 52.6 to 52.4, compared to analyst forecast of 51.8. Numbers above 50 show expansion.

From the technical point of view, U.S. Dollar Index climbed above the resistance at 98.00 – 98.15 and is trying to settle above the 98.70 level. In case this attempt is successful, U.S. Dollar Index will head towards the next resistance level, which is located in the 98.90 – 99.05 range. It should be noted that RSI is in the overbought territory, so the risks of a pullback are increasing.

EUR/USD Retreats As Brent Oil Rallies Towards The $78.00 Level

EUR/USD is under strong pressure as traders react to rising oil and natural gas markets.

Natural gas prices surged as Qatar was forced to shut the world’s largest LNG export plant after it was struck by an Iranian drone. Rising natural gas prices will put additional pressure on the weak European economy. In this environment, ECB may decide to cut rates, which will be bearish for the European currency.

Traders also had a chance to take a look at the Retail Sales data from Germany. Retail Sales declined by -0.9% month-over-month in January, compared to analyst forecast of -0.2%.

Currently, EUR/USD is trying to settle below the support level at 1.1675 – 1.1690. In case this attempt is successful, EUR/USD will head towards the next support, which is located in the 1.1585 – 1.1600 range.

GBP/USD Dives As Traders Focus On The War In The Middle East

GBP/USD tested new lows as traders reacted to geopolitical developments and focused on rising energy prices.

In the UK, traders also focused on the Nationwide Housing Prices report. The report indicated that housing prices increased by +1% year-over-year in February, compared to analyst consensus of +0.7%.

In case GBP/USD manages to settle below the support level at 1.3400 – 1.3415, it will get to another test of the next support, which is located in the 1.3315 – 1.3330 range.

USD/CAD Moves Higher As Traders Ignore The Rally In The Oil Markets

USD/CAD gained ground despite the strong rally in the oil markets as traders focused on the safety of the U.S. dollar. Other commodity-related currencies have also found themselves under pressure in today’s trading session.

In Canada, traders also focused on the S&P Global Manufacturing PMI report. The report showed that Manufacturing PMI grew from 50.4 in January to 51.0 in February, compared to analyst consensus of 50.7.

If USD/CAD stays above the 50 MA at 1.3681, it will move towards the nearest resistance level at 1.3725 – 1.3740.

USD/JPY Tests New Highs As Traders Bet On Dovish BoJ

USD/JPY soared above the 157.50 level, supported by the strong rally in the oil market. Rising oil and natural gas prices will put significant pressure on Japan’s economy, which is heavily dependent on energy imports.

A successful test of the resistance at 158.00 – 158.50 will push USD/JPY towards the next resistance level, which is located in the 161.50 – 162.00 range. RSI has recently moved into overbought territory, but there is enough room to gain momentum in the near term.

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