(MENAFN- Daily Forex)

• The euro surged against the yen on Monday, hitting fresh highs as yen weakness spread across markets.
• With risk appetite firm and central bank decisions ahead, traders continue to favor buying dips in this strong uptrend.

The euro rose against the Japanese yen during trading on Monday, or perhaps better put, the Japanese yen has fallen against almost everything on Monday. That being said, we are at a fresh new high, and it does look like the overall momentum still favors buying dips in this pair, as the euro clearly is the obvious winner at this juncture.

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The 175.50 yen level underneath should continue to be massive support. And it looks to me like the euro may be trying to get to the 180 yen level before it's all said and done. You should also keep in mind that there is a Bank of Japan as well as a European Central Bank decision for interest rates this week, and that will cause a lot of volatility. Nonetheless, as long as we have more of a“risk on” type of attitude around the world, it does make sense that we continue to see this one open up to the upside, given enough time.

EURUSD Chart by TradingViewI Can't Short

And at this point in time, it's almost impossible to get short. If we were to break down below the 172 yen level, then maybe we start to fall apart, but it's going to take a lot to even get to that area. I expect to see a lot of noise. I expect to see a lot of questions asked about everything.

I also expect to see a lot of carry traders continuing to take advantage of the Japanese yen getting eviscerated. The situation between the Americans and the Chinese seems to be cooling off a bit. And if that does in fact end up being the case, then I think you have to look at this as a market that continues to rise as the Japanese yen is considered to be a safety currency.

That is being run from as people are looking for a higher rate of return in almost all assets. All things being equal, this is still an uptrend, and I think that continues to be the case going forward. With that, I think you have to look at this as a market that is long only at the moment.

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