YEN is Last Night’s Big Winner

The Dow Jones gain of 80 points yesterday revamped the EUR/USD rally with a new high recorded at 1.4625. The pair has since retreated to 1.4590 - see chart.

Without question, the YEN has been the big winner in the last 24 hours raising by over 100 pips against both the USD and the EUR. The USD/YEN now records 90.92 whilst the EUR/YEN sits at 132.70.

This is strange because the low-yielding YEN is the flag bearer during bad economic times and tends to rise when the Dow Jones falls. Yet the Dow Jones recorded a significant rise yesterday.

Why is this? Although risk appetite has clearly risen this week with the return of increased liquidity, rallies seem to be stalling as momentum wanes. Perhaps this is another sign that investors are more reluctant to enter the market and that real conviction in the current rally is evaporating.

If you do intend trading the Forex during these conflicting times, ensure you use good money management methods by not risking more than 5% of your budget on any one trade.

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