forexeatrading 
- USD now not responding to yield benefit
- USD/JPY breaks YTD lows with bearish momentum indicators
- USD/CAD closes under 200DMA, eyes deeper draw back
- RSI and MACD help continuation of USD promoting
The US dollar is underneath strain regardless of a backdrop of sharply increased Treasury yields, with its conventional safe-haven attraction being challenged throughout the board. Whether or not it is protected havens just like the USD/JPY and Swiss franc or cyclicals just like the Aussie and Loonie, there’s been a notable shift in sentiment.
If this continues, the unwinding of prolonged USD longs might have additional to run, particularly in pairs like yen and USD/CAD, the place bearish setups are beginning to emerge.
Nonetheless A Secure Haven?
The safe-haven standing of the US greenback is being questioned by markets, with vastly increased US Treasury yields now not fuelling energy within the dollar as they did for a lot of the post-pandemic period. As a substitute, the greenback is coming underneath strain, particularly towards different perceived protected havens such because the Swiss franc, Japanese yen and gold.
You may see that clearly within the chart under, with the US Dollar Index (DXY) getting hammered regardless of sharply increased yield differentials between america and international locations like Japan and Switzerland.
Supply: TradingView
Even currencies with robust cyclical attributes—such because the Australian, New Zealand, and Canadian {dollars}—have managed to catch a bid regardless of the risk-off atmosphere, underlining how dramatic the shift away from the US greenback has been.
Ought to this development persist, it suggests these currencies hit hardest by the US greenback energy lately—just like the Japanese yen and Canadian greenback—could have room to run far additional than the strikes already seen.
USD/JPY Breaking Down
Supply: TradingView
USD/JPY screens are a good brief setup within the close to time period, with the worth breaking beneath year-to-date lows set earlier this week throughout early Asian commerce on Friday. Momentum indicators are additionally supporting the draw back, with the minor uptrend in RSI (14) now damaged and the indicator pushing to recent lows. MACD has additionally crossed under zero, confirming strengthening bearish momentum.
These contemplating shorts might promote the break of 144.00 with a cease above the extent for cover. 141.75 screens as a possible goal, with 139.60 one other chance for these in search of better risk-reward.
USD/CAD Breaches 200DMA
Supply: TradingView
USD/CAD bears may even be eyeing a deeper draw back flush, with the pair breaking and shutting beneath the 200-day transferring common on Thursday. The worth now finds itself resting on 1.3947, the excessive set in August final 12 months. A break of this stage might encourage different merchants to affix the bearish transfer, producing a setup the place shorts could possibly be established with a cease above the 200-day transferring common for cover.
1.38115 screens as an preliminary goal, with different minor ranges equivalent to 1.3748, 1.3700 and 1.3647 additionally in play. Momentum indicators favour retaining a bearish bias, with RSI (14) trending strongly decrease however not but oversold. MACD additional bolsters the bearish sign.
