- The Swiss franc has rallied a bid against the Japanese yen during trading on Tuesday, as we see safety assets compete for capital inflows.
- At this point, it looks like people are starting to focus on the Bank of Japan again, because of the lowly Swiss franc and gain against it, that speaks volumes.
- It’s worth noting that the market has bounced from the 50 Day EMA, which of course is a technical indicator that a lot of people pay attention to.
The Overall Uptrend Will Continue
In this environment, I would anticipate that it is probably only a matter of time before we see some type of bounce in this general vicinity, so I think it makes sense that we will continue the overall uptrend. Quite frankly, if this market continues to rise, then I think it will show just how weak the Japanese yen is, and I think we will see the Japanese yen get crushed against almost everything. Given enough time, I think we will see this market break above the psychologically important ¥150 level again, and therefore the Japanese yen will continue to be on his back foot.
As long as the Bank of Japan continues to do everything it can to keep interest rates lower, they are essentially printing currency, and therefore it makes the currency less desirable. In this scenario, I suspect it is probably only a matter of time before we see all currencies break out against the Japanese yen, because even though they did intervene in the market recently, it’s not enough to turn around the trend. Most of the time that central banks get involved, all they do is slow down the rate of change. That’s about as good as it gets for them.
If we do break down below the 50-Day EMA, the ¥144 level will be looked at as a potential support barrier. If we break down through there, then the trend could start to break down even more, perhaps sending the market down to the ¥140 level. I’m not holding my breath for that, but it is something that could possibly happen. Keep in mind that this pair tends to be a slow mover, but it is an excellent indicator as to how these 2 safety currencies are going to behave against other currencies.
Ready to trade our daily Forex forecast? Here’s a list of some of the best Forex trading platforms to check out.