The Nikkei Index has recovered ground this morning, and the prospect of a weaker Yen is intriguing short term.
Rapid Swings but Yen Quiet
Global equity markets continue to produce rapid swings, and the Nikkei Index has not been immune from the turmoil. However, Japanese equities responded with a positive day of trading today.
The Yen finds itself in an intriguing position. It is near 109.50 against the U.S Dollar. The Japanese currency has been one of the few major currencies not to lose a large amount of ground to the U.S Dollar since late last week.
Resistance an Alluring Prospect for Yen
While support looks to be around 108.75 for the Yen, it is resistance which is generating our interest. The Bank of Japan may have to become more aggressive long term, but for the time being, they remain rather passive. Resistance around 110.50 looks like a potential target for the Yen against the U.S Dollar.
The combination of a dovish Bank of Japan and the potential for the Nikkei Index to rebound near term as the global markets stabilize, make buying the U.S Dollar versus the Yen an alluring prospect.
In the short term, we believe the Yen may be positive. The mid-term and Long-term we are unbiased.
Yaron Mazor is a senior analyst at SuperTraderTV.
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