Sep 19, 2024 (MENAFN via COMTEX) --
(MENAFN - Daily Forex)
During the trading session on Tuesday, we have seen the euro rally quite a bit against the Japanese yen, as it looks like we are trying to do everything we can to form some type of bottom in this market. Ultimately, I believe at this point, the euro might end up being fairly strong against the yen, as we have seen the yen so overbought. This is true here, as well as many other currency pairs.
At this point, I suspect that the 155 yen level will end up being the floor in the market, unless of course something drastic happens that has a huge risk off trade going forward. Keep in mind though, Friday is the Bank of Japan interest rate decision and that of course will have its own influence on the market and could cause this pair to be very volatile. This is normal for yen-related pairs, but in the next few weeks, I suspect it will only get worse when it comes to the volatility.
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All of that being said, you get paid at the end of every day to hang on to this pair. I think the carried trade may come back into vogue, especially in some of the other currencies like the New Zealand dollar, the
Australian dollar against the yen. And I think the euro will just simply follow right along.
On the other hand, if we were to get a crash below the 155 yen level, we could see this pair just really fall apart we could drop another 500 pips rather quickly. In general, this is a market that I think continues to be noisy, very volatile, but we are in the midst of trying to form some type of bottoming power pattern in the yen related pairs on the whole. So, with that being said, I do think that the risk is to the upside, not the down in the current environment.
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COMTEX_457907110/2604/2024-09-19T04:44:50
