- The Euro rallied rather significantly during the trading session on Wednesday as the 160 yen level has been pierced, the market breaking above the 50 day EMA also is worth paying attention to.
- Now that we are between the 50 day EMA and the 200 day EMA indicators, the question will be whether or not the market is going to notice this area as a potential problem or if we will just power through it.
- The Euro has seen a lot of strength against the US dollar and therefore it’s seen a lot of strength around the world, but the Japanese yen is a completely different animal altogether.
Yen Giving Up Gains?
We did see the yen give up some of its gains during the previous session. So, it’ll be interesting to see whether or not the market continues to look at it that way. When you look at the euro against yen on a long term chart, it does make a certain amount of sense that we go back to the 165 yen level, which of course is an area where we’ve seen a lot of resistance previously.
The moving averages will cause that noise mentioned previously and it’s probably worth noting that the interest rate decision is going to continue to see a lot of attention paid to. So with this, I like the idea of buying dips as the 155 yen level looks to be a bit of a floor, but it’s obvious to me that we still have a lot of overhead resistance. I guess I just don’t want to buy into short-term resistance. I’d rather find some type of value play that I can take advantage of. Keep in mind that even though the interest rates in Europe are fairly small at the moment, the markets are seeing interest rates rise in the German bond markets, as well as France. With this, you get paid at the end of every day with positive swap in this pair which of course is a big bonus.
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