USD/CAD, USD/MXN and USD/BRL Forecasts – US Dollar Mixed in Western Hemisphere

USD/CAD Technical Analysis

The US dollar has drifted a little bit lower during the trading session here on Wednesday as the 1.37 barrier continues to be a bit of an issue. If we can break above 1.37 and go looking at the 1.3750 level, then we could threaten a significant breakout.

The market continues to pay close attention to oil, but at the same time, higher interest rates in the United States definitely have a significant influence as they are rising. So, I think the downside is very limited here at this point in time.

USD/MXN Technical Analysis

The US dollar has found itself to be a little bit stronger against the Mexican Peso during trading on Wednesday, as we go looking towards the 17.5 level. Higher yields in America mean that the US dollar needs to strengthen. The interest rate differential still favors Mexico, and I don’t really want to climb this hill.

What I’m looking for is some signs of relief in yields, and if I get that, the US dollar should turn around against the peso. The 17.5 level also features the 50-day EMA. I think that offers a little bit of a short-term ceiling, but really what we need is people to calm down first.

USD/BRL Technical Analysis

Finally, the US dollar finds itself slightly stronger against the Brazilian Real, but we are hanging around the 5.0 level. This is a large number that will attract a lot of attention. If we do rally from here, 5.10 is a very real possibility. On the other hand, if we fall, we just continue the longer-term trend.

I do favor the Brazilian Real right now, but I also think that the world right now is very concerned about the war in the Middle East and the fact that we just aren’t seeing an end to it. The Brazilian interest rate is significantly higher than the United States, it’s something like 14.5%, so over time that will continue to be a winner. Institutions should continue to drive this lower.

If you’d like to know more about how to trade forex, please visit our educational area.