The Japanese Yen started the day lower but quickly rallied to thepositive side following a U.S. housing report that showed the U.S.economy may be recovering. Technical factors are holding the USD JPY in a range.
The Japanese Yen started the day lower but quickly rallied to the positive side following a U.S. housing report that showed the U.S. economy may be recovering.
The rally in the Yen is surprise as strong equity markets usually triggers renewed interest in the carry trade. This occurs when traders borrow the lower yielding currency to invest in higher yielding assets.
Technically this market is being draw into retracement zone at .98.53 to 99.22. This area represents a major decision point for most traders. A close over 99.22 could set up the market for a rally through the last swing top at 101.44. This action would make 95.68 the new higher bottom.
If the market starts to build a lower top at 99.22 then look for it to begin to rollover to the downside with the swing bottom at 93.53 the first target.
Watch the order flow at 98.53 to 99.22 for clues as to how to play the current trading conditions.