USD/JPY, USD/CAD and USD/CHF Forecasts – US Dollar Rallies Early on Monday

USD/JPY Technical Analysis

The US dollar initially fell against the Japanese yen on Monday but has turned around to show signs of life as interest rates continue to climb. The interest rate differential between the United States and Japan, of course, is well known, and with that being the case, I think you have to look at this as a market that is going to continue to be one that is driven by the carry trade.

That being said, we have recently found ourselves looking at Bank of Japan intervention. That probably is a short-term blip on the radar more than anything else. So with that being the case, I’m looking at this as more of a grind back towards 160 yen.

USD/CAD Technical Analysis

The US dollar has continued its attempt to move higher against the Canadian dollar. That does make a certain amount of sense. We are in the process of bouncing from the bottom of a larger consolidation range. Because of this, I think you have to be somewhat cognizant of the possibility of a little bit of noise, but I do think overall this is a market that will try to find its way back toward the 1.37 level.

The 1.37 level, of course, is an area where traders will often see resistance over the last several months. And with the 50-day EMA sitting there as well, I do think it makes a certain amount of sense that it would be a little bit of a ceiling. Makes for a good target. We are above 4.41% in the 10-year yield in America. That makes the dollar stronger.

USD/CHF Technical Analysis

The US dollar has bounced against the Swiss franc during the trading session here on Monday as well, using the 0.78 level as a bit of a floor as it has multiple times as well as a ceiling. And the market memory coming back into fruition here makes a certain amount of sense, as traders will look at this through the prism of a market much like the Japanese yen, which is basically an interest rate play.

It is a market that will continue to have the specter of the Swiss National Bank behind it because, after all, the Swiss are more than willing to intervene if necessary. And of course, the rising rates in America make the dollar stronger regardless, so I think we’re going to try to get back to the 0.7950 level.

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