U.S. Dollar Tests New Highs
U.S. Dollar Index gains ground as traders focus on rising oil prices and react to the developments in government bond markets.
Brent oil moved towards the $110.00 level as traders worried that U.S. may restart the military operation against Iran. These worries raised demand for safe-haven assets and provided support to the American currency.
European government bond markets suffered a strong sell-off today. Japanese bonds have also found themselves under strong pressure. The yield of 10-year UK government bonds climbed above 5.18%, the highest level since June 2008.
From a big picture point of view, bond traders have started to worry that rising oil prices will trigger a bond crisis. As a result, traders rushed to safety of the U.S. dollar as the U.S. is the world’s biggest oil producer.
U.S. Dollar Index climbed above the resistance at 98.85 – 99.00 and is trying to settle above the 99.25 level. In case this attempt is successful, U.S. Dollar Index will move towards the next resistance at 99.70 – 99.85.
EUR/USD Remains Under Strong Pressure
EUR/USD is losing ground as traders react to the developments in bond markets. Trump – Xi summit did not deliver a breakthrough, and traders worry that the situation in the Middle East could get worse.
EUR/USD settled below the previous support at 1.1665 – 1.1670 and is trying to settle below the 1.1625 level. A move below this level will open the way to the test of the next support at 1.1585 – 1.1600.
EUR/USD Price Forecast
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See all EUR/USD forecastsGBP/USD Tests Support At 1.3335 – 1.3350
GBP/USD tests new lows amid political crisis in the UK. The sell-off in UK government bond markets puts additional pressure on the British pound.
Currently, GBP/USD is trying to settle below the support at 1.3335 – 1.3350. In case this attempt is successful, GBP/USD will head towards the next support level, which is located in the 1.3185 – 1.3200 range. RSI is in the oversold territory, so the risks of a rebound are rising.
USD/CAD Moves Higher As Precious Metals Markets Retreat
USD/CAD gained ground as traders focused on the strong sell-off in precious metals markets, which was triggered by rising oil prices. Other commodity-related currencies have found themselves under strong pressure in today’s trading session.
The nearest resistance level for USD/CAD is located in the 1.3775 – 1.3790 range. A successful test of this level will open the way to the test of the next resistance at 1.3860 – 1.3875.
USD/JPY Climbed Above The 158.50 Level
USD/JPY continues to move higher as traders focus on rising Treasury yields and ignore the risk of interventions from the BoJ. The yield of 2-year Treasuries climbed above the 4.07% level, while the yield of 10-year Treasuries settled above 4.57%.
From the technical point of view, USD/JPY climbed above the resistance at 158.00 – 158.50 and is heading towards the 159.00 level. If USD/JPY settles above 159.00, it will head towards the psychologically important 160.00 level. A move above 160.00 will push USD/JPY towards the resistance level at 161.50 – 162.00.
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