USD/JPY, USD/CAD and USD/CHF Forecasts – Interest Rate Differentials Drive Greenback Dominance

USD/JPY Technical Analysis

The US Dollar has rallied quite nicely against the Japanese Yen early on Wednesday, and it looks like short-term pullbacks are buying opportunities. I think the 162-yen level is a little bit of a floor. All things being equal, this is a market that I think continues to be a market where the interest rate differential continues to see traders looking to get long.

I have no interest in shorting, but keep in mind that the Thursday session is the jobs report this week, it is not Friday. The United States will, of course, be closed as Independence Day is on Friday. So, with that being said, this is a pair that will be very noisy over the next 24 hours, but ultimately it still favors the upside.

USD/CAD Technical Analysis

The US Dollar continues to grind a bit to the upside against the Canadian Dollar, but we are essentially just going back and forth in sideways action to maybe digest the gains that got us to the 1.42 level. The 1.42 level is an area that will remain noisy, but I think you have a situation where any significant dip ends up being a buying opportunity.

USD/CHF Technical Analysis

The US Dollar continues to strengthen against the Swiss Franc as well, and I think it is probably only a matter of time before we see this market go looking towards the 0.82 level. The interest rate differential, of course, favors the US Dollar here as well, and beyond that, the Swiss National Bank is pretty open on the idea of wanting a weaker Franc.

With the EU slowing down a little bit, I think you also have to keep in mind that a lot of Swiss exports will find trouble. We are in the middle of forming a bullish flag, a break to the upside measures for a move of roughly 0.83.

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