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The American dollar was not supported by surging Treasury yields. The EUR/USD shifted in the direction of 1.0850. The USD/JPY pair fell back when it encountered resistance near 131.50, while the AUD/USD rose again above the 0.6700 mark.
Despite surging Treasury yields, the Dollar Index shows that the US dollar is still under pressure. While the yield on 2-year Treasuries increased above 4.00%, the yield on 10-year Treasuries was able to stabilize above the 3.55% mark. Unfortunately, the American currency received no tangible assistance from these actions.
Tuesday’s trading was centred on the trade balance report, which revealed a $91.6 billion goods trade deficit in February. Analyst predictions were exceeded by CB Consumer Confidence, which was negative for safe-haven assets like the US dollar.
From a broad perspective, the US Dollar Index is gradually moving in the direction of the 102 level as traders anticipate that the Fed would be compelled to adopt a more dovish stance in order to limit the financial crisis.
As traders wager that the ECB will keep raising rates in spite of issues in the European banking sector, the EUR/USD is attempting to consolidate above the 1.0850 level. The resistance level at 1.0875 will be the next target for the EUR/USD currency pair if it can get over 1.0850.
While commodity markets advanced, AUD/USD surged again above 0.6700. During today’s trading session, other currencies linked to commodities have also benefited from support. While USD/CAD surged towards 1.3600, NZD/USD recovered towards 0.6250.
After failing to settle above 131.50, the USD/JPY moved back below the 131 mark. Curiously, despite surging Treasury yields, USD/JPY was unable to continue its upward trend. 130.50 is the nearest important support level for the USD/JPY exchange rate. A decline below this level will allow for the psychologically significant support at 130 to be put to the test.
During today’s trading session, the GBP/USD pair is also trending upward. There is lots of room to continue building up the upward momentum while the RSI is still in the moderate range. GBP/USD will go closer to the 1.2400 level if the barrier near 1.2340 can be successfully tested. The pair climbed to a crucial resistance level of 1.2349, a 7-week high.
