US Dollar Forecast: Bullish Bias Prevails; Setups on EUR/USD, USD/JPY, USD/CAD

Strength of the US Dollar: Important Factors
In the face of altering macroeconomic conditions, the US Dollar Index, or DXY, has been rising consistently, indicating strong demand for the USD. The following are the main causes of the dollar’s strength:

Hawkish Fed Expectations: According to recent data, the Fed may maintain higher interest rates for an extended period of time, which would help the USD appreciate.
Resilient US Economic Data: Persistent inflation worries and robust job market data have bolstered trust in the US economy.
Risk Aversion: The dollar’s appeal as a safe haven is still favored by geopolitical concerns and market volatility worldwide.
Let’s examine the technical setups for EUR/USD, USD/JPY, and USD/CAD while keeping these variables in mind.

EUR/USD: Negative Trend Below Important Resistance
The euro is still struggling against the rising dollar, which is putting pressure on the EUR/USD pair. A dovish posture is suggested by recent ECB remarks, raising the likelihood of a decline.

Technical Levels to Keep an Eye on:
Resistance: where sellers have been active, between 1.0800 and 1.0825.
Support: 1.0700–1.0675, below which a break might hasten losses to 1.0600.
Bias: Below 1.0800, bearish, with a possible decline if important support levels are broken.

USD/JPY: Continues to Rise as Yield Differences Expand
Because the Federal Reserve and the Bank of Japan have different monetary policies, the USD/JPY pair is still rising. The BoJ’s ultra-low interest rates and continued dovishness have contributed to the yen’s decline.

Technical Levels to Keep an Eye on:
Resistance: psychological resistance zone, 150.00 to 150.50.
Support: 148.50 to 148.00; a decline below this level would indicate a temporary correction.
Bias: Bullish while above 148.50, with room to rise if US yields continue to rise.

USD/CAD: The Impact of US Dollar Strength on Oil Prices
As the strength of the US dollar contends with rising oil prices that bolster the Canadian dollar, the USD/CAD pair has been fluctuating. Future actions will also be heavily influenced by the Bank of Canada’s position.

Technical Levels to Keep an Eye on:
USD/CAD might reach 1.3700 if it breaks out of the resistance, which is between 1.3600 and 1.3650.
A deeper retracement may result from a breach below the support level, which is between 1.3500 and 1.3475.
Bias: Neutral to positive, with room for growth if the US dollar continues to rise or oil prices decline.

In tempus aptent taciti sociosqu ad litora torquent per conubia nostra, per inceptos himenaeos.

Jonathan Archer

Market Prospects: USD Strength Is Expected to Continue
With market players keeping a tight eye on impending economic data, Fed announcements, and risk sentiment for more guidance, the US dollar is still in a strong position. The following are important events to watch:

One important Fed indication that may affect rate expectations is US PCE inflation data.
Comments by Fed Chair Powell — The upward trend of the dollar might be strengthened by any hawkish tone.
Trends in Global Risk If uncertainty continues, safe-haven flows into USD may rise.
With the EUR/USD, USD/JPY, and USD/CAD scenarios supporting sustained dollar strength, the bullish bias is currently in effect. In the upcoming sessions, traders should continue to exercise caution and keep an eye out for significant technical breakouts.