Why Monex think the dollar will break higher

Some
thoughts from Monex on the USD:

• Solid
  US job growth: The strong March job numbers hint at robust economic health
  which will potentially delay Fed rate cuts.
• Bond
  yields: Strong growth and higher commodities have pushed yields higher, which
  increases appeal for the dollar.
• Market
  dynamics: Despite a brief delay, there is potential for significant technical
  breaches in key major pairs which suggest readiness for the dollar to
  strengthen, especially if CPI points higher this week.
• Central
  bank policies: Expected dovish shifts from the ECB and BoC contrast with that
  of the Fed and should enhance dollar attractiveness

One risk to
a higher dollar this week is if a strong CPI pushes USDJPY into 152 and
triggers possible intervention. That should only mean short-term pressure on
the dollar but a risk worth considering.

Also think watching global growth is important
for the dollar. There have been green shoots in the data in other parts of the
world which explains some of the recent dollar weakness as well.

This article was written by Arno V Venter at www.forexlive.com.