- The Euro has broken higher against the Japanese Yen during the trading session here on Friday to break above the 173 Yen level again.
- This is a market that has been pretty interesting over the last several weeks as we continue to find reasons one way or another to get long. have no interest whatsoever in shorting this pair because I don’t have any interest in owning the Japanese yen.
- The Bank of Japan has to deal with a bond market that is struggling.
There have been a couple of days here where there just hasn’t been much in the way of bids. And if that is going to continue to be the way forward, you have major problems.
Ultimately, I think this is a situation where you’re looking at a central bank in Japan that may have to get involved in quantitative easing again, and that could send this pair much higher. You can see over the last couple of years; it’s just been a steady grind higher. We did have a pullback and a little bit of sideways action, and now we’re approaching the 175 yen level, which is a huge barrier going back to the middle of July of last year.
Bullish Market. Don’t Fight It.
The market is bullish. We just flagged a little bit of a bullish flag and there’s just nothing on this chart to think about shorting. If we broke down below the 171 yen level, then maybe we could go look into the 50 day EMA, which is closer to the 169 yen level, but I just don’t see that happening. I certainly wouldn’t be a seller of that.
I’d be looking for a buy on the dips that show us some type of opportunity to start piling into the euro and away from the Japanese yen again, even the US dollar, which has struggled quite significantly against the Japanese yen has shown itself to be somewhat resilient against the Japanese yen. That just shows you how weak the currency is.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.