U.S. Dollar Tests New Highs As WTI Oil Climbs Towards $100: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Stays Strong Ahead Of The Weekend

U.S. Dollar Index is moving higher desptie the disappointing Michigan Consumer Sentiment report.

The report indicated that Michigan Consumer Sentiment decreased from 56.6 in February to 53.3 in March, compared to analyst forecast of 54.

Year-ahead inflation expectations increased from 3.4% in February to 3.8% in March as consumers reacted to rising oil prices.

Traders also remained focused on the war in Iran. Iran’s steel plant was attacked, and the country promised to retaliate by attacking steel plants in the Gulf.

U.S. Dollar index climbed above the resistance at 99.70 – 99.85 and is trying to settle above the 100.00 level. In case this attempt is successful, U.S. Dollar Index will move towards the next resistance level, which is located in the 100.35 – 100.50 range.

EUR/USD Tests Support At 1.1510 – 1.1525

EUR/USD is losing ground as traders focus on rising oil prices. WTI oil climbed above the $98.00 level, while Brent oil rallied above $111.00 level.

Currently, EUR/USD is trying to settle below the support level at 1.1510 – 1.1525. In case this attempt is successful, EUR/USD will move towards the next support, which is located in the 1.1410 – 1.1425 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

GBP/USD Remains Under Pressure

GBP/USD pulls back as traders focus on economic reports from the UK. Gfk Consumer Confidence declined from -19 in February to -21 in March, compared to analyst forecast of -24.

Retail Sales declined by -0.4% month-over-month in February, compared to analyst consensus of -0.7%. On a year-over-year basis, Retail Sales grew by +2.5%. The better-than-expected reports did not provide support to the British pound as traders focused on geopolitical tensions.

GBP/USD pulled back below the support level at 1.3315 – 1.3330 and is trying to settle below the 1.3280 level. If GBP/USD manages to settle below 1.3280, it will move towards the next support at 1.3215 – 1.3230.

USD/CAD Gains Ground As Traders Rush To Safety Of U.S. Dollar

USD/CAD tests new highs as traders ignore the rally in commodity markets. Gold climbed back above the $4500 level, while silver moved above the $70.00 level. Other commodity-related currencies are swinging between gains and losses in today’s trading session.

A successful test of the resistance at 1.3885 – 1.3900 will open the way to the test of the next resistance level at 1.3980 – 1.3995. RSI is in the overbought territory, so the risks of a pullback are increasing.

USD/JPY Tests The Psychologically Important 160.00 Level

USD/JPY attempts to settle above the psychologically important 160.00 level amid lack of positive catalysts for the Japanese yen.

Rising oil prices put significant pressure on Japan’s economy, which is dependent on energy imports. Traders bet that BoJ will be forced to keep rates unchanged despite inflation risks in order to provide support to the Japanese economy.

There are no signs of interventions from the Bank of Japan. It remains to be seen whether BoJ is ready to provide support to the yen in the current market environment.

If  USD/JPY settles above the 160.00 level, it will move towards the resistance level at 161.50 – 162.00. RSI remains in the moderate territory, so there is plenty of room to gain additional upside momentum in the near term.

A move above the 162.00 level will push USD/JPY towards the 164.50 level. It should be noted that USD/JPY has not tested these levels since 1986.

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