The dollar keeps gaining momentum as the week begins

Oil Prices Surge, Boosting the Dollar’s Momentum

Crude oil prices are climbing sharply today, with WTI crude advancing nearly 5% to approach $74.65. This renewed strength in oil markets has contributed to a revival of the petrodollar dynamic, helping the US dollar outperform this week. This comes after the dollar had previously lost some of its appeal as a safe haven asset over the past year.

Rising oil prices are also putting pressure on the Japanese yen, while the Swiss National Bank has signaled its readiness to intervene to curb the Swiss franc’s appreciation amid ongoing tensions in the Middle East. These factors have created favorable conditions for the dollar, and traders—many of whom were previously betting against the greenback—are now shifting their positions in its favor.

With today’s rally, technical indicators are beginning to align with the dollar’s upward trend. This shift could provide the momentum needed for the dollar to maintain its strength in the coming weeks.

EUR/USD Daily Chart

Key Currency Pairs Face Technical Turning Points

At the start of the year, EUR/USD appeared poised for gains, even briefly surpassing the 1.2000 mark. However, following cautionary signals from the European Central Bank, the pair has struggled to sustain upward momentum.

Now, with traders covering short dollar positions, the euro is under renewed pressure. This week’s decline threatens to push EUR/USD below both its 100-day (red line) and 200-day (blue line) moving averages simultaneously—a significant technical event if confirmed.

The last time EUR/USD traded beneath both of these key daily averages was in March of the previous year, highlighting the importance of this potential breakdown. Should this level give way, attention could quickly shift toward the 1.1500 area, opening the door for a sharper short-term correction.

Similar technical weakness is emerging in GBP/USD, which has dropped to its lowest level in nearly three months after decisively falling below 1.3400.

Meanwhile, USD/CHF has climbed another 0.7% to reach 0.7843, bolstered by the Swiss National Bank’s actions. AUD/USD has slipped a further 0.4% to 0.7063 after a brief overnight rebound. If support near 0.7025-0.7030 fails, the focus will turn to the 0.7000 threshold, potentially signaling further declines for the Australian dollar.