At this point, I suspect that the 155 yen level will end up being the floor in the market, unless of course something drastic happens that has a huge risk off trade going forward. Keep in mind though, Friday is the Bank of Japan interest rate decision and that of course will have its own influence on the market and could cause this pair to be very volatile. This is normal for yen-related pairs, but in the next few weeks, I suspect it will only get worse when it comes to the volatility. Interest Rate SwapAll of that being said, you get paid at the end of every day to hang on to this pair. I think the carried trade may come back into vogue, especially in some of the other currencies like the New Zealand dollar, the Australian dollar against the yen. And I think the euro will just simply follow right along.(Click on image to enlarge)On the other hand, if we were to get a crash below the 155 yen level, we could see this pair just really fall apart we could drop another 500 pips rather quickly. In general, this is a market that I think continues to be noisy, very volatile, but we are in the midst of trying to form some type of bottoming power pattern in the yen related pairs on the whole. So, with that being said, I do think that the risk is to the upside, not the down in the current environment.More By This Author:EUR/USD Forecast: Rallies Ahead Of FOMCCrude Oil Forecast: Gives Up Early Gains On FridayPairs In Focus – Sunday, Sept. 15
EUR/JPY Forecast: Bottoming Out?
