The US dollar continues to strengthen against major counterparts as markets await important macroeconomic data scheduled for release in the coming hours. Investors are focusing on US GDP figures, the Personal Consumption Expenditures (PCE) price index, and Canada’s labour market statistics. These releases could significantly influence expectations regarding the future policy path of the Federal Reserve and set the tone for currency market movements.

The strengthening of the US currency has also been supported by rising geopolitical tensions in the Middle East. Over the past 24 hours, the conflict involving Iran, the US, and Israel has intensified, leading to a sharp rise in oil prices and increased demand for safe-haven assets. Reports indicate strikes on tankers in the region, along with conflicting information about the potential closure of the Strait of Hormuz. Rising energy prices and heightened geopolitical risks are supporting the dollar as demand for liquid defensive assets increases. At the same time, market participants remain cautious ahead of key data releases that could alter expectations for interest rates.

USD/JPY

The USD/JPY pair continues to move higher and is trading near its annual highs. Technical analysis suggests the possibility of a downward pullback if the 159.45 level holds as resistance. However, if buyers manage to establish a firm break above this level, the pair could advance towards the 160.20–161.00 range.

Key events for USD/JPY:

• today at 14:30 (GMT+2): US GDP
• today at 14:30 (GMT+2): US Core PCE Price Index
• today at 16:00 (GMT+2): US Job Openings (JOLTS)

USD/CAD

The USD/CAD pair is also moving higher, although it remains significantly below its yearly highs compared with USD/JPY. Last week, the price found support near 1.3520, where a doji candlestick pattern formed, signalling a potential reversal. The pair is currently consolidating above 1.3600, and if the upward momentum continues, a test of recent highs in the 1.3720–1.3750 range may follow.

Key events for USD/CAD:

• today at 14:30 (GMT+2): Canada Employment Change
• today at 14:30 (GMT+2): Canada Unemployment Rate
• today at 14:30 (GMT+2): Canada Labour Force Participation Rate

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