FX levels for EUR/USD, USD/CAD & GBP/USD – USD dumps amid peace repricing

The US Dollar may have just seen its brightest days at the cost of a world-shaking US-Iran-Israel conflict.

Having bullied through a gigantic rebound since February, the Greenback had been invincible. Petrodollar trades and higher-for-longer US rates tend to largely support the global reserve currency.

Add to it historic bearish positioning against it, and traders saw the perfect conditions to push the USD to 11-month highs.

This was enough to question whether dedollarization was just a fantasy, rather than a proper regime change in Financial Markets.

Nevertheless, things changed in the past couple of weeks. President Trump, frustrated by developments such as lower stock markets, higher commodity prices, and a more expensive dollar—economic trends he publicly dislikes—found himself in a pessimistic mood right ahead of the November midterm elections.

Hence, the Administration has been pushing aggressively for a truce, specifically because this aligns with the prolonged mid-April deadline for the conflict to end.

While a proper peace deal hasn't yet been reached, diplomatic attempts are, for now, heading the right way, leading to a consequent tumble in the US Dollar.

You can see the direct result from today's FX performance.

The US Dollar lost around 2% of its value against a basket of major currencies and has begun to revert to its trajectory.

Reaching a key support level, however, Currency traders could be taking a break from their dollar sales. We will explore key levels right after taking a quick look at the Dollar Index chart.

Stalling at the major 98.00 Support, the US Dollar could be seeing a short-term pause in its selling; hence, it is important not to get caught in the crosswinds of a potential reversal.

However, this could provide opportunities to catch a pullback in the currency and offer decent setups in major FX pairs!

In preparation for the next phase of a longer-run dollar selloff (conditional on the conflict really coming to an end), we will look at three key FX Majors and their intraday timeframes to see how the range in the Dollar Index affects their own currency pairs: EUR/USD, GBP/USD, and USD/CAD.

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EUR/USD quickly profited from the truce to rally 2,000 to 1.18.

However, meeting a significant resistance zone and overbought RSI conditions, the odds for upside continuation from here a slim (on the short-run).

In such conditions, buying on a pullback makes the most sense.

• Aggressive buyers could look at 1.1750 for entries (less optimal)
• The best setup would be located at the 1.17 to 1.1720 March Pivot
  • This would require the peace process to keep progressing.
• Aggressive sellers could look to enter at current levels and will want to see a break below 1.17 to add to their positions (in the event of worsening fundamentals)

Levels of interest for EUR/USD Trading

Resistance levels

• Resistance Zone around 1.18 (+/- 150 pips)
• 1.1850 - 1.1860 Resistance
• Morning highs 1.18114
• Sep 2021 Highs – Resistance 1.19 to 1.1950 Zone

Support levels

• 1.17 to 1.1720 March Pivot
• Pivotal Support 1.1625 - 1.1635
• 1.1540 to 1.1570 War Support
• War and August 2025 Lows 1.14

USD/CAD had taken quite a lead on its reversal from the higher-part of its 1.3550 to 1.3950 range.

Finding buyers at the 1.3750 Pivotal support, the pair already begun its pullback, hence it could be wise to wait for a retest of the higher bound of the 1.38 pivot zone and bear channel (1.3810) to enter shorts.

Coming back above the 4H 50-period MA (1.3862) would put back the advantage to the bulls.

Levels of interest for USD/CAD Trading

Resistance Levels

• 1.38 Pivot +/- 150 pips
• 1.3850 Resistance
• 1.39 to 1.3925 Support turned resistance
• 1.3950 Range Highs

Support Levels

• 1.3750 Pivotal Support
• 1.3630 to 1.3660 Key Support
• 1.3550 Main 2025 Support
• 1.35 Key Psychological Support

The Pound is under similar conditions as the Euro but grabs the upper hand in terms of strength and momentum against the US Dollar.

GBP/USD is reaching overbought conditions and could see a decent support retest in coming times after extending without pullbacks.

Aggressive buyers will look at the 1.3500 psychological level to catch a wider rally in the pair.

More defensive pullback traders will have to wait for a retest of the key pivot, which would only be reached if the tone sours ahead of Thursday's US-Iran talks.

Levels of interest for USD/CHF Trading

Resistance levels

• December Resistance 1.36 (testing)
• Resistance 1.37 zone
• 2025 Resistance around 1.38
• 1.3850 to 1.39 2021 Resistance

Support levels

• 1.35 minor support
• Key Pivot and Support 1.34 to 1.3440
• Pivotal Support 1.3250 - 1.33
• 1.32 War Support

Safe Trades!

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