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Arguments to buy the US Dollar versus the Yen and the Swiss Franc are becoming more persuasive.

It is not often that all indicators align and appear to point in one direction, and although there was never a truer thing said than that there is no sure thing, the closest you get is when you can just about make out a 'form' from the mosaic chaos.

That seems to be what is happening with two of the globe's main safe-haven currencies: the Japanese Yen and the Swiss Franc, particularly in their USD pairings.

Starting with the charts - both USD/JPY and USD/CHF are inclining to more upside.

Singapore based lender UOB Bank make USD/JPY their chart of the day Friday, highlighting the significant trendline break and strong upwards momentum (see below).

"USD surged and took out the strong resistance levels at 106.45 and 106.70 with ease. The up-move is accompanied by strong momentum and while it is too early to expect the start of a sustained rally, the price action indicates an increasing risk of a stronger recovery," says OUB analyst Quek Ser Leang.

Above: UOB Bank USD/JPY chart.

Commerzbank analyst Karen Jones is also constructive in her outlook for the pair, as long as it can hold above the 105.00 level.

"USD/JPY has recovered slightly and is starting to nibble away at its 20-day ma at 106.77," she says adding, "we believe that it is probable that we will see the market hold above the psychological support at 105.00 for now. We look for gains to 107.90 (21st February high), above which targets the 110.48 February high."

Above: Commerzbank USD/JPY chart.

Commerzbank's Jones is also suggesting more upside for USD/CHF.

"USD/CHF has eroded the 0.9490 recent high, the 38.2% retracement at 0.9513 and the 55-day ma. This negates our negative bias and implies scope for recovery to the 200-day ma at 0.9674," she writes.

Jone's adds a note of caution to those thinking of jumping into the trade 'feet first', however, suggesting that her Demark indicator is signaling possible short-term exhaustion on the 240 and 60-minute charts (having reached 13 counts). This means we could see a short-term pull-back to the area of the neckline at 0.9465 however, after that, she sees the uptrend dominating.

Above: Commerzbank USD/JPY chart.

More significantly, perhaps, Julius Baer analysts make USD/CHF their FX pic of the day, and call for the pair to rise to parity, no less.

"USD/CHF sees a medium-term cycle bottom. We recommend going long with a stop at 0.92 and a possible target at 1.00," says Julius Baer analyst Mensur Pocinci.

They posit bottoming momentum to suspect the 0.92 bottom was a "bear market trap" and we are now going higher.

Above: Julius Baer USD/CHF chart.

That is not all. DailyFX currency strategist Michael Boutros picked out USD/CHF as a potential long trade on Mar 8.

"Bottom line: if we breach confluence resistance here, look for a stretch towards 0.9600," says Boutros, referring to the "confluence" of obstacles at 0.9520.

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Macro Outlook Negative for Safe Havens

The macro outlook for safe-haven currencies, of which JPY and CHF are leading examples, turned particularly sour on Thursday after headlines that President Trump would be meeting North Korean leader Kim Yong Un in May to discuss a peaceful accord over the latter's nuclear weapons programme.

This is an unprecedented development and the first time in decades that a US president has met his North Korean counterpart.

Clearly, the deleveraging of risk associated with the event is likely to weigh on safe-havens like the Yen and Franc and therefore supports the bullish technical picture from the charts.

Another lesser factor supporting the bullish technicals is recent Chinese data showing inflation rising in February.

This appears to support the outlook for global inflation more generally too.

Money supply data further fuelled inflation expectations, and if global inflation is on the rise, it is likely to be negative for safe-havens such as the Yen and the Franc.

"The strong economic growth in both the US and Europe in addition to the inflationary impact of tariffs to the US, mean that global inflation is likely gearing for an uptrend in the months ahead," says Rand Merchant Bank analysts Isaah Mhlanga and Mpho Tsebe.

Of course, it could also be argued that a revival of the global reflation story is likely to be negative for the USD due to the 'rest-of-the-world' (RoW) theory that investors will start to look outside of the US for investment opportunities, which will weigh on the Dollar.

But it will also be negative for safe-havens since global growth is positive for risk appetite. Given heightened US interest rate expectations in a battle between the two, I know which I'd be backing. The USD.

The lack of a change in the Bank of Japan's message at its monetary policy meeting last night was also a disappointment for Yen-bulls.

The take-away remained that interest rates are likely to remain super-low in Japan for some time, limiting upside for the Yen as investors seek returns by parking their capital elsewhere, where rates are higher.

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