Last week’s Yen bid looked like a straight risk averse play with investment capital coming home (Japan) from Europe and the US. However, the rapid appreciation of the Yen is reminiscent of what had occurred last fall when the world economies looked to be on the brink of collapse. Having lived through what seems like the worst and with some positive indicators finding their way through the economic releases, the latest Yen move could be more exaggerated than the last, based on global expectations for recovery. Looking at the EUR/JPY pair, the best currency pair indicating risk and equity appetite, we see the pair pulling itself up off last week’s lows as it keeps retesting support levels after each appreciation. The short-term perspective below could provide some short-term levels as the market deliberates its next move halfway through the summer months.
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