Forex News: DXY Eyes 100, JPY shrouded in the storm
2022-10-31
Japan’s dollar-yen exchange rate has been on a tear over the past few months, with the U.S. dollar weakened against the yen, and the yen strengthened against the dollar. While the dollar has strengthened against most other major currencies, the yen has advanced against the dollar. This is because the U.S. dollar is weak against most other major currencies while the yen is strong against the dollar. And with the recent strength of the yen, it seems the strong yen is giving way to the stronger dollar. However, this week has seen the opposite trend play out.
For example, on Monday, the dollar was at a two-year low against the yen, which means the yen is weaker than the dollar right now. The key here is that the dollar has been on a tear over the past few months, rising to its highest level against the yen in almost a decade. With that said, the dollar remains the stronger currency against the yen today. So, what will the dollar do today? Let’s take a look at the latest candlestick analysis of the DXY, its performance over the past few days, and what the next few hours may have in store.
DXY Chart
As of the writing of this article, the DXY has climbed to 95.273 against the dollar. This is an increase of 0.40% from last Friday’s close and 0.19% more than the day before. The DXY has gone up against the dollar for the past four days in a row, and its performance has been strong during this time. The daily bar chart below shows the daily changes in the DXY.
Japan’s Yen
As we’ve discussed, the dollar has been on a tear against the yen, and the yen has been on a tear against the dollar. As a result, most other major currencies have been trading at or near a one-for-one basis against the dollar. But recently, the yen has hit another level against the dollar, with the yen trading at a premium against the dollar. Now, the question is whether this continues. As we move into the weekend, let’s take a look at the latest action in the Yen.
What Does the Next Day’s Action Indicate?
So far this week, the Yen has been trading at a premium against the dollar, which means there’s been more demand for the Yen than supply. This has caused the Yen to trade at a premium against the dollar, and this premium may continue. What will happen tomorrow is the key. If the dollar remains strong, then there will be more demand for the Yen, and the Yen will fall. However, if the dollar weakens, then there will be less demand for the Yen, and the Yen will surge in value. This will take place tomorrow, and the next day too. So, we’ll have to see what the next few hours have in store for us.
Should You Buy the Japanese Yen?
We mentioned earlier that the dollar has been on a tear against the yen, and the Yen has been on a tear against the dollar. Now, we need to ask ourselves: is the dollar strengthening or falling? If the dollar were to fall, then the Yen would fall with it. But as we noted above, that hasn’t happened yet. In other words, the dollar is trading at a premium against the Yen. So, is it a good time to buy the Yen? In our opinion, the answer is yes.
However, we need to make sure we’re buying the right currency. We like to buy the JPY because it’s a “trackable currency”. This means that we can buy the JPY and sell it again in just a few days, at a profit. We like to make sure we’re short the JPY, so we can make a quick profit with little effort. And, of course, we’re going to look for the best opportunities to buy the JPY in the futures markets too.
Bottom line
As of the writing of this article, the DXY is trading at a premium of 0.40% against the dollar. This is at its highest level against the dollar since December of 2016. So, what happens tomorrow? The key is whether the dollar remains at this level or falls. If the dollar falls, then the Yen will fall with it. But as we’ve discussed, that’s not what happened yet. So, the Yen remains a good buy right now, especially as the dollar heads for another week of gains.
