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.