USD/JPY, USD/CAD, and USD/CHF Forecasts – Carry Trade Interest Drives Dollar Rally

USD/JPY Technical Analysis

The US dollar has rallied a bit against the Japanese yen as we are trying to break above the 200-day EMA. The market breaking above the 200-day EMA on a close, I think, would be a very bullish turn of events. The hammer from the previous session on Monday does suggest that there is real support here, especially near the 155-yen level, but if we were to break down below there, it could really open the floodgates. Keep in mind that the Bank of Japan and the Federal Reserve intervened, that’s what caused this chaos, but the interest rate differential will continue to entice carry traders to hold the dollar against the yen, as they get paid at the end of the day.

USD/CAD Technical Analysis

The US dollar has rallied against the Canadian dollar during the session as we are in the midst of forming a double bottom. Ultimately, this is a market that continues to see a lot of noisy behavior, but a push towards the upside, maybe towards 1.4150 again, could be possible. The 50-day EMA offering support comes into the picture as well, and the 38.2% Fibonacci retracement level has been tested twice and found supportive. This is an area that a lot of people seem to be watching.

USD/CHF Technical Analysis

The US dollar slightly negative against the Swiss franc, but only barely so, and it looks like it’s in the midst of forming some type of double bottom as well. In fact, it looks very much like the US dollar Canadian dollar pair. And with that, this is a market that seems to be attracted to the 0.8150 level. The Swiss National Bank is very interested in keeping the Swiss franc weak, therefore that helps the carry traders here in this market.

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