USD/CHF, USD/CAD, and USD/MXN Forecasts – Rate Differentials Keep Dollar Buyers in Control

USD/CHF Technical Analysis

The US dollar has initially fallen against the Swiss franc, but turned around to show signs of life as the carry trade continues to play out here. This is a currency pair that pays traders to hang on to it to the upside, and therefore a lot of people like to hold the dollar against the franc for that reason alone.

Ultimately, this market is also one that has recently broken above significant psychological resistance in the form of 0.81, and with that, traders continue to see this as a market that looks pretty bullish. But at the same time, the US dollar against the Swiss franc is typically somewhat of a grinder. It’s not a quick-moving pair most of the time. Certainly looks bullish here, though.

USD/CAD Technical Analysis

The US dollar initially fell against the Canadian dollar during trading here on Friday, only to turn around and show signs of life. By doing so, it looks as if the market is trying to do everything it can to get towards the 1.4150 level. The 50-day EMA underneath has offered support. We’ll see if it continues to do so going forward. Ultimately, this is a market that the interest rate differential pays traders to hold dollars as well.

USD/MXN Technical Analysis

The US dollar has drifted a little bit lower against the Mexican peso, and while the interest rates in America are fairly high by historical standards, traders still get paid to hold pesos, not dollars here. So, this, too, is following the interest rate differential path. The 50-day EMA is right at the 17.43 level, and of course, we’ve seen some sideways action between 17.35 and 17.60 over the last several weeks.

Looks like more of the same here. 17.50 seems to be a little bit of a magnet for price, but ultimately this is a market that’s just trying to figure out what to do longer term. This pair does get to be choppy for a while. This is part of the reason why these pairs attract so many inflows at times to use for that overall interest rate differential payment at the end of the day. Right now, though, there are so many questions involving the Middle East, the global economy, and everything else; it’s not a surprise that we’re somewhat stagnant.

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