Euro crisis is sending important message about the yen

In the midst of this euro crisis, there’s one other currency that caught my attention: the Japanese yen. Every forex trader knows that the yen tends to appreciate when there’s a major global risk event. And a risk of contagion and sovereign debt default in Europe could not be a better example of a global risk event.


And that’s why I’m a little surprised by the performance of the yen in the past couple of days. While global stock markets sold off, the pair USD/JPY held on to its gains, as the yen failed to appreciate. That’s a strong sign that the yen will most likely continue to lose value against the dollar.


As you can see in the chart below, the USD/JPY pair has broken trough the downtrend, which is another reason to be buying the pair on dips.



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