U.S. Dollar Retreats Amid Sell-Off In The Oil Markets: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Index Tests Support At 98.85 – 99.00

U.S. Dollar Index is losing ground as traders focus on the strong sell-off in the oil markets. WTI oil is down by more than 4% amid reports indicating that President Trump believes that the U.S. is in the final stages of talks with Iran.

Traders also prepare for the release of FOMC Minutes, which may have an impact on market dynamics.

Currently, U.S. Dollar Index is trying to settle below the support level at 98.85 – 99.00. In case this attempt is successful, U.S. Dollar Index will head towards the 50 MA at 98.73. A move below the 50 MA will push U.S. Dollar Index towards the support level, which is located in the 98.00 – 98.15 range.

EUR/USD Rebounds From Multi-Week Lows

EUR/USD gained ground as demand for risk assets increased amid pullback in the oil markets. In the EU, tradres focused on the Producer Prices report from Germany.

The report indicated that PPI increased by +1.7% year-over-year in April, compared to analyst forecast of +1.5%.

EUR/USD received support in the 1.1585 – 1.1600 range and is trying to settle above the 1.1640 level. In case this attempt is successful, EUR/USD will move towards the resistance at 1.1665 – 1.1680.

GBP/USD Tests Resistance At 1.3450 – 1.3465

GBP/USD moved higher as traders focused on inflation data from the UK. Inflation Rate declined from 3.3% in March to 2.8% in April, compared to analyst forecast of 3%. Core Inflation Rate decreased from 3.1% to 2.5%, while analysts expected that it would fall to 2.6%.

Currently, GBP/USD is trying to settle above the resistance level at 1.3450 – 1.3465. In case this attempt is successful, GBP/USD will move towards the next resistance, which is located in the 1.3535 – 1.3550 range.

USD/CAD Pulls Back As Oil Prices Fall

USD/CAD moved lower as traders focused on the rally in precious metals markets, which was triggered by the pullback in the oil markets. Other commodity-related currencies gained ground in today’s trading session.

From the technical point of view, USD/CAD failed to settle above the resistance at 1.3775 – 1.3790 and declined below the 1.3750 level. In case USD/CAD manages to settle below 1.3750, it will move towards the nearest support level at 1.3700 – 1.3715.

USD/JPY Moves Lower Amid Falling Treasury Yields

USD/JPY is losing some ground as traders focus on the pullback in Treasury yields. The yield of 2-year Treasuries declined towards the 4.05% level, while the yield of 10-year Treasuries pulled back below 4.60%. Treasury yields moved lower as traders hoped that the U.S. and Iran will reach a deal.

There are no signs of interventions from the Bank of Japan, but USD/JPY remains stuck near the 159.00 level and is not able to gain additional upside momentum. Traders are cautious and wait for additional catalysts that could push USD/JPY above the psychologically important 160.00 level.

The nearest support level for USD/JPY is located in the 158.00 – 158.50 range. In case USD/JPY settles below the 158.00 level, it will head towards the next support, which is located in the 154.50 – 155.00 range.

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