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Japanese Yen Traders Don’t Seem to Know if Risk is on or Risk is Off

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Sep 5, 2010.

  1. forextrends24

    forextrends24 New Member

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    Today’s sample of Forex Analysis from ForexHound.com

    The USD JPY traded sharply higher Friday morning, but the strong gains faded after a report showed the U.S. Services Sector slowed during August. The rise in demand for stocks appeared to be reviving the carry trade earlier in the session. This is a situation where investors borrow the lower yielding Yen then sell it to invest in higher yielding assets. Friday’s trading action in the Japanese Yen suggests that traders can’t make up their minds as to whether risk is on or risk is off.

    The Japanese Yen began to strengthen against the Dollar after the weak U.S. ISM Services index indicated slower growth. The Dollar/Yen pared its gains while some traders took defensive positions against the possibility of a weaker U.S. economy.

    The chart pattern suggests a possible double-bottom formation. This pattern will be confirmed if 85.90 is broken and at the same time will signal a change in trend to up.

    Read full article at ForexHound.com as well more Forex Trading articles including Forex Technical Analysis and Forex Education

    Disclaimer: Trading foreign exchange on the margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore should not invest money that you cannot afford to lose.
     
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