EUR/USD, USD/JPY and USD/CHF Forecasts – US Dollar Continues to Fight Others

EUR/USD Technical Analysis

The euro is pretty choppy in early trading on Monday as we are fighting between the reality that we are at the very bottom of a major trading range, but at the same time, we have to worry about headlines coming out of the Middle East. After all, we have the first rounds of talks between the Americans and the Iranians, and it got somewhat contentious afterwards. So, a little US dollar strength is based on that and, of course, the fact that rates had jumped in the bond market.

The 1.14 level continues to be a significant support level, though, so I am still expecting a bit of a bounce unless something seriously kicks off in the Middle East.

USD/JPY Technical Analysis

The US dollar continues to rally against the Japanese yen. I think this is going to be the story in the long term, that every time it dips, it offers a buying opportunity. Sure, the Bank of Japan could intervene, but I think before it’s all said and done, the US dollar will probably go as high as 224 against the Japanese yen based on the technical analysis.

And quite frankly, most of the time you get a target like that, we tend to overshoot it. So, with that, I’m already long in this pair. I collect swap at the end of every day and plan on doing so for years. Short-term pullbacks should see support somewhere around the 160-yen level.

USD/CHF Technical Analysis

The US dollar continues to rise against the Swiss franc as well, the 0.81 level above being the next barrier. Short-term pullbacks, I think, are buying opportunities here also due to the massive amount of interest rate differential between these two currencies.

Keep in mind that the Federal Reserve is now expected to perhaps hike 25 basis points between now and the end of the year. That’s a pretty big deal. So, we’ll see how that plays out, but either way, we know that the Swiss National Bank wants to keep rates close to 0.

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