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MENAFN- Daily Forex)
- Taking a look at the dollar against the Japanese yen and you can see it was an extraordinarily volatile session during the trading session on Friday after the jobs report came out stronger than anticipated, which naturally had people running to the Japanese yen.
- This was a very difficult trading session for anybody who was involved and therefore if you find yourself on the wrong side of the trade, don't be too upset about it.
I think at this point, you have to look to the longer term outlook for both of these central banks. And the reality is, even though Japan's getting a little better, the U.S. economy is still very strong. And as a result, you should continue to see the U.S. dollar strengthen against most currencies, including the Japanese yen, but I also recognize that with the sell-off that we had seen in the stock market, it does make a certain amount of sense that people might've been looking for the safety of the Japanese yen, specifically Japanese investors involved in America.
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But in the longer term, you do get paid to hang on to this USD/JPY pair . And I think that's something that a lot of people ignore, at least in the retail space. If we can break above the 158 yen level, then I think you've got a situation where we could make another attempt to break out completely, but right now it looks like we're going to bounce around a little bit and just panic.
That's not that unusual for this pair, but it's difficult to make an argument for anything other than an uptrend right now. So I wouldn't read too much into this other than there might've been some liquidity issues. The Bank of Japan might've been involved. We just don't know, and of course, there was a lot of repositioning after that non-farm payroll announcement. I remain bullish, but I recognize this is going to be a headache.
EURUSD Chart by TradingView
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