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The USD showed modest gains at the start of the North American session, driven by higher US interest rates and oil prices. Major pairs like EUR/USD fell -0.17%, while USD/JPY rose 0.13%. Risk-off flows pressured AUD/USD and NZDUSD by -0.28% and -0.20% respectively. Oil prices rebounded above $100 to $100.53 as Iran's decision to retain enriched uranium conflicted with US nuclear policy. US yields increased, with the 2-year note up 5.8 basis points to 4.097% and the 10-year up 3.7 basis points to 4.607%. US stock futures pointed to declines as yields and the USD strengthened.
The market's focus remains on oil prices and US monetary policy. Higher oil prices could support the USD through energy-linked flows, while rising yields may pressure equities. Traders are also monitoring the upcoming US economic data releases, including jobless claims and housing data, which could influence market direction. The USD's technical outlook depends on whether risk-off sentiment persists and if oil prices maintain support above $100.
For traders, the key levels to watch are the 100.92 and 101.61 moving averages for oil, which could determine further price action. The USD's performance against majors and the response of US equities to yield movements will be critical. Investors should also assess how geopolitical tensions in the Middle East impact energy markets and broader risk appetite.
