USD/JPY, USD/CAD and USD/MXN Forecast – US Dollar Mixed Early Tuesday

USD/JPY Technical Analysis

The US dollar started out falling against the Japanese yen during the trading session on Tuesday, but has turned around to threaten the 158 yen level again. The 158 yen level, of course, is an area that people have been paying close attention to as the market is likely to continue to see this barrier between 158 yen and 160 yen as very difficult.

If we can get above the 160 yen level, that is a major breakout for this pair that goes back to 1990, so keep that in mind. You do get paid to hold the US dollar against the Japanese yen and I do think short-term pullbacks continue to be opportunities in this market.

USD/CAD Technical Analysis

The US dollar has fallen against the Canadian dollar, which makes a certain amount of sense as there are a lot of concerns about crude oil around the world right now. And we are looking at the market as being at the bottom of a consolidation area that extends down to the 1.35 level.

If we were to break down below the 1.35 level, then the market could really start to unravel, perhaps down to the 1.33 level. On the other hand, if we turn around and bounce from here, then I think the market is likely to go looking to the 50-day EMA above near the 1.37 level. I do think we will continue to see a lot of back and forth.

USD/MXN Technical Analysis

The US dollar went back and forth during the course of the trading session against the Mexican peso, as we are sitting just above the 17.50 level. The 50-day EMA sits right there as well, and if we were to break down below the 17.50 level, the market could open up the possibility of a drop back down to the 17.2 level. Keep in mind that you do get paid to hold the US dollar in this market. Short-term rallies I think offer selling opportunities at the first signs of exhaustion as the carry trade is still very strong and is likely to continue to be something that you have to pay close attention to.

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