Forex Forecasts – US Dollar Fights Back as Dynamic Support Holds

USD/CAD Technical Analysis

The US dollar fell against the Canadian dollar over the last several days and continued that momentum early on Wednesday, but has since turned around. The market finds itself just above the 50-day EMA, an indicator that some traders use for dynamic support. So, it is an interesting spot for it to happen. This has the backdrop of weaker-than-anticipated CPI coming out of the United States and better-than-anticipated jobs numbers coming out of Canada, but also has the backdrop of the Middle East, and everything going on in the oil markets could end up being lively here.

USD/CHF Technical Analysis

The US dollar has rallied a bit against the Swiss franc during the session on Wednesday in what has been a consolidation as of late. The market has, over the last couple of months, been very bullish and, of course, has recently seen the so-called Golden Cross about 6 or 7 days ago. The 50-day EMA broke above the 200-day EMA to kick that signal off. Interest rates favor the United States by a wide margin; traders get paid to hang onto this pair, and that is more likely than not going to be the overarching theme here.

USD/JPY Technical Analysis

The US dollar initially fell against the Japanese yen, but as has happened multiple times here recently, the market has turned right back around after a drop and is now watching the 163 yen level with interest, as it was resistance previously. The 50-day EMA is racing towards the 161 yen level, an area that has been supported a couple of times in the last few weeks. The uptrend looks very much intact, the interest rate differential continues to favor the US dollar, and of course, the Bank of Japan finds itself in a situation where the debt load being serviced by higher rates could put real strain on Japan itself.

If you’d like to know more about technical analysis and how traders use it, please visit our educational area.