U.S. Dollar Retreats Despite Rising Treasury Yields: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Is Losing Ground At The Start Of The Week

U.S. Dollar Index pulls back as traders react to the weaker-than-expected ISM Services PMI report. The report indicated that ISM Services PMI decreased from 56.1 in February to 54.0 in March, compared to analyst forecast of 55.

Traders also stay focused on the situation in the Middle East. WTI oil settled near the $111.50 level as Iran rejected U.S. proposals. However, demand for safe-haven assets is not rising. Perhaps, traders believe in a last-minute deal. In case the deal is not reached tomorrow, U.S. dollar may get additional support.

Currently, U.S. Dollar Index is trying to settle back below the support level at 99.70 – 99.85. In case this attempt is successful, U.S. Dollar Index will head towards the next support at 98.85 – 99.00.

EUR/USD  Attempts To Settle Above 1.1550

EUR/USD gained ground as demand for riskier assets increased despite rising tensions in the Middle East.

There are no important economic reports scheduled to be released in the EU today due to Easter Monday holiday, so traders will stay focused on general market sentiment.

From the technical point of view, EUR/USD managed to settle above the support level at 1.1510 – 1.1525 and is trying to settle above the 50 MA at 1.1534. If EUR/USD manages to settle above this level, it will move towards the next resistance, which is located in the 1.1585 – 1.1600 range.

GBP/USD Gains Ground Amid Rising Demand For Riskier Currencies

GBP/USD has also moved higher, supported by stronger demand for riskier assets.

GBP/USD climbed back above the support at 1.3215 – 1.3230 and tested the 50 MA at 1.3264. If GBP/USD moves above the 50 MA, it will head towards the next resistance at 1.3315 – 1.3330. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.

USD/CAD Is Moving Towards The Support At 1.3885 – 1.3900

USD/CAD moved away from recent highs as demand for commodity-related currencies increased despite the pullback in precious metals markets. Oil prices were mostly flat as traders reacted to news from the Middle East.

The nearest support level for USD/CAD is located in the 1.3885 – 1.3900 range. If USD/CAD manages to settle below the 1.3885 level, it will head towards the support at 1.3800 – 1.3815.

On the upside, USD/CAD needs to settle above the 1.3950 level to gain upside momentum in the near term. In case USD/CAD climbs above the 1.3950 level, it will move towards the resistance at 1.3880 – 1.3995.

USD/JPY Gains Ground As Treasury Yields Rise

USD/JPY is moving higher as traders focus on rising Treasury yields. The yield of 2-year Treasuries climbed towards the 3.85% level, while the yield of 10-year Treasuries settled above 4.30%.

High energy prices continue to put pressure on the Japanese yen as traders expect that Japan’s economy will slow down and BoJ will be forced to keep rates near current levels.

It remains to be seen whether BoJ is ready to defend the yen in case USD/JPY settles above the 160.00 level. Meanwhile, USD/JPY bulls remain cautious amid intervention risks. At this point, the market is in balance, but the situation may change quickly.

If USD/JPY climbs above the 160.00 level, it will head towards recent highs near the 160.50 level. A move above 160.50 will push USD/JPY towards the resistance at 161.50 – 162.00. It should be noted that USD/JPY has not traded above 162.00 since 1986.

If you’d like to know more about how to trade forex, please visit our educational area.