U.S. Dollar Tests New Highs Amid Strong Demand For Safe-Haven Assets: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Index Tests Resistance At 100.35 – 100.50

U.S. Dollar Index keeps moving higher as traders focus on potential escalation in the Middle East. Demand for safe-haven assets is rising, which is bullish for the American currency.

Today, traders had a chance to take a look at Dallas Fed Manufacturing Index report. The report indicated that Dallas Fed Manufacturing Index declined from 0.2 in February to -0.2 in March, compared to analyst forecast of +0.7.

Traders also focused on comments from Fed Chair Powell, who noted that long-term inflation expectations remained in control.

Currently, U.S. Dollar Index is trying to settle above the resistance level at 100.35 – 100.50. In case this attempt is successful, U.S. Dollar Index will move towards the next resistance level, which is located in the 101.10 – 101.25 range.

EUR/USD Retreats As Traders Focus On Germany’s Inflation Data

EUR/USD pulled back as traders focused on inflation data from Germany. Inflation Rate increased from 1.9% in February to 2.7% in March, in line with analyst estimates.

Euro Area Economic Sentiment decreased from 98.2 in February to 96.6 in March, compared to analyst consensus of 96.8. The reports showed that high energy prices have already started to put significant pressure on the European economy.

EUR/USD pulled back below the support at 1.1510 – 1.1525 and moved towards the 1.1450 level. If EUR/USD manages to settle below 1.1450, it will head towards the next support, which is located in the 1.1410 – 1.1425 range.

GBP/USD Tests Support At 1.3215 – 1.3230

GBP/USD is losing ground as traders stay worried about developments in the Middle East. Brent oil prices have pulled back towards the $112.00 level after an unsuccessful attempt to settle above $117.00, but this move did not provide support to the British pound.

A successful test of the support level at 1.3215 – 1.3230 will open the way to the test of the next support at 1.3115 – 1.3130. It should be noted that RSI is in the oversold territory, so the risks of a rebound are increasing.

USD/CAD Tests New Highs Amid Falling Demand For Commodity-Related Currencies

USD/CAD gains ground as demand for commodity-related currencies declines despite rising precious metals markets.

From the technical point of view, USD/CAD climbed above the resistance at 1.3885 – 1.3900. In case this attempt is successful, USD/CAD will move towards the next resistance level at 1.3980 – 1.3995.

USD/JPY Pulls Back As Treasury Yields Fall

USD/JPY declined as traders focused on the pullback in Treasury yields. The yield of 2-year Treasuries moved towards the 3.80% level, while the yield of 10-year Treasuries declined below 4.35%.

The nearest support level for USD/JPY is located in the 158.00 – 158.50 range. If USD/JPY pulls back below the 158.00 level, it will head towards the next support at 154.50 – 155.00. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

On the upside, USD/JPY needs to settle back above the psychologically important 160.00 level to have a chance to gain upside momentum in the near term.

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