- The euro has fallen rather significantly during the trading session on Tuesday, breaking down drastically against the Japanese yen.
- We have seen the Japanese yen strengthen against most other currencies around the world so this should not be a huge surprise.
- That being said, this candlestick is rather large, and it could begin to show signs of extreme negativity, but I think at this point in time you are essentially “jumping the gun” trying to jump in and short this market right here.
Risk Appetite
Keep in mind this pair will be heavily influenced by risk appetite, meaning that the pair will rally as traders believe that it is an environment worth taking risks in. Of course, the exact opposite is true and that’s what we have seen on Tuesday as people are running for the exits. That being said, we have seen negative candlesticks like this before that have simply been turned right back around, and therefore I’m not overly worried at the moment.
Top Forex Brokers
That being said, be cautious about your position sizing, because we have a lot of noise out there that could come into the picture in cause problems. The market had previously paid close attention to the ¥169.40 level above, for short-term support, but at this point we have broken through that so cleanly that I think it will eventually disappear from market memory. The 50-Day EMA sits near the ¥167 level and is rising so I think it’s a very real possibility that we use that for a bit of a springboard.
If we can break to the upside, clear the ¥170 level would be a huge victory for the euro, and I think it would also be seen in other Japanese yen related pairs, as it would be a major sign of Japanese yen weakness. That’s been the case for some time, and I suspect that it’s probably only a matter of time before that reenters the psyche of most traders as you continue to get paid at the end of the session via the swap.
Ready to trade our Forex daily forecast? We’ve shortlisted the best FX trading platform in the industry for you.