The US dollar first rebounded during Thursday’s trading session before pulling out of the highs after Fed Fund rates for December 2020 became negative. In other words, the market is expected to have negative interest rates in the United States and could therefore become a reality faster than expected. That being said, it is not good for the US dollar and there will be people looking to get away from that currency. However, the market should continue to fall much more because the Japanese yen will remain much more attractive in this environment.
Also, you have to keep in mind that the Japanese yen is a bit of a “risky” currency, so with the horrible number of jobs posted on Friday, chances are people will continue to favor the yen over to several other currencies. However, the market should continue to follow the trend which had reached the level of ¥ 105 for some time. I have already said that selling short-term rallies is probably the best way to go, and we have had another opportunity to do so.
The yen is a popular asset during turbulent times.
On the upside, the level of ¥ 107 should be resistance and sold. The fact that the candlestick formed a bit of an inverted hammer suggests that we have to go further, so I like the idea of fading short-term rallies more than anything else, but I would also be a seller if we fell in breakdown under the bottom of the candlestick for the day. Anyway, I have no interest in buying this pair, there is a long way to go before things change completely. Expect a lot of volatility during the trading session on Friday, but frankly think that it is only a matter of time before you sell again, so watch any pop of this pair due to the mass figures. non-farm pay as a gift to start short circuit to higher levels. The 50-day EMA above will also offer resistance as it unfolds and shows how weak this pair has been. With that in mind, I have many reasons to think that we are still going down, so I’m not looking for an upward set up. If that changes, I will let you know here at Daily Forex.