U.S. Dollar Retreats As Oil Prices Dive 6%: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Pulls Back As Traders Focus On Geopolitical News

U.S. Dollar Index is losing ground as traders focus on progress in U.S. – Iran negotiations.

President Trump has recently said that negotiations were “proceeding nicely”. It is expected that U.S. and Iran will extend the ceasefire and continue negotiations.

Iran’s nuclear program, as well as the reopening of the Strait of Hormuz, remain the key parts of the potential deal. WTI oil pulled back towards the $91.00 level, while Brent oil settled below $98.00 as traders reacted to Trump’s comments. Falling oil prices reduced demand for safe-haven assets, which was bearish for the American currency.

It should be noted that U.S. bond markets are closed due to Memorial Day holiday, but forex traders may look at the European bond markets to see what will happen when U.S. bond markets reopen. European bond yields are falling as geopolitical risk premium declines.

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 next support level, which is located in the 98.00 – 98.15 range.

EUR/USD Moves Higher As Oil Prices Retreat

EUR/USD gains ground as traders focus on the strong sell-off in the oil markets. There are no important economic reports scheduled to be released in the EU today, so traders will stay focused on geopolitical news.

If EUR/USD manages to settle above the 50 MA at 1.1637, it will head towards the nearest resistance level, which is located in the 1.1665 – 1.1680 range. A move above the 1.1680 level will push EUR/USD towards the next resistance at 1.1770 – 1.1785.

GBP/USD Tests The 1.3500 Level

GBP/USD tests new highs amid rising demand for risk assets. UK markets are closed due to Late May Bank Holiday, so traders will stay focused on news from the Middle East.

From the technical point of view, GBP/USD climbed above the previous resistance level at 1.3450 – 1.3465 and is trying to settle above the 1.3500 level. In case this attempt is successful, GBP/USD will move towards the nearest resistance, which is located in the 1.3535 – 1.3550 range.

A move above the 1.3550 level will open the way to the test of the 1.3650 level. This resistance level has been tested many times and proved its strength. RSI is close to overbought territory, but there is enough room to gain additional upside momentum in case the right catalysts emerge.

USD/CAD Pulls Back From Multi-Week Highs

USD/CAD moved away from recent highs as traders reacted to the rally in precious metals markets. Gold is up by 1.3%, while silver gained 3%. Other commodity-related currencies are also moving higher in today’s trading session.

The nearest support level for USD/CAD is located in the 1.3775 – 1.3790 range. In case USD/CAD declines below the 1.3775 level, it will head towards the 50 MA at 1.3756. A move below the 50 MA will open the way to the test of the support at 1.3700 – 1.3715.

USD/JPY Is Stuck Near The 159.00 Level

USD/JPY is moving lower as traders react to general weakness of the American currency.

The technical picture remains unchanged as USD/JPY is stuck near the 159.00 level. A successful test of the support at 158.00 – 158.50 will open the way to the test of the next support level, which is located in the 154.50 – 155.00 range.

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