The US dollar is regaining strength after a recent pullback, supported by lingering uncertainty surrounding geopolitical developments. Mixed signals on US–Iran negotiations — ranging from talk of a possible ceasefire extension to reports of increased military preparations — are creating an uneven outlook for markets and prompting renewed demand for safe-haven assets. As a result, the dollar is attracting buyers again, even in the absence of a strong fundamental driver.

Expectations for upcoming US macroeconomic releases are also lending support, as investors assess how new data may influence the path of interest rates. Still, geopolitical headlines remain the dominant force, while economic indicators are viewed more as catalysts for short-term volatility. Commodity market trends and shifting expectations for global growth continue to shape the broader market backdrop.

USD/JPY

USD/JPY is advancing towards key resistance in the 159.70–160.00 area, reflecting a combination of dollar recovery and reduced safe-haven demand for the yen. If current conditions hold, the pair may extend gains and challenge its March highs. However, failure to break above this zone could trigger a pause or a short-term correction.

Key events for USD/JPY:

  • today at 15:30 (GMT+3): US initial jobless claims
  • today at 16:45 (GMT+3): US Services PMI
  • today at 23:30 (GMT+3): Federal Reserve balance sheet

USD/CAD

USD/CAD is showing signs of a potential trend reversal after its recent decline, indicating a shift in near-term sentiment. Technical signals, including a bullish “piercing pattern” on the daily chart, point to possible upside towards 1.3700–1.3750. On the downside, a move below 1.3620 would likely renew bearish pressure, opening the way towards 1.3520–1.3560.

Key events for USD/CAD:

  • today at 15:30 (GMT+3): Canada RMPI
  • today at 15:30 (GMT+3): Canada New Housing Price Index
  • tomorrow at 15:30 (GMT+3): Canada Core Retail Sales

The dollar’s rebound is being shaped by geopolitical uncertainty and conflicting developments around Iran. With USD/JPY nearing key resistance and USD/CAD forming reversal signals, current price levels are particularly important. The next move will depend on both news flow and incoming economic data, which could either reinforce dollar strength or lead to renewed weakness if tensions begin to ease.

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