Fri, 27 May 2011 00:00:00 +0200

Yen Surges against Dollar on Safe Haven Appeal

The yen rebounded sharply versus the dollar and yesterday following the comments from Jean-Claude Juncker. The sharp one day appreciation in the yen comes at a time when the yen was beginning to weaken versus the dollar over the past month given a broad rebound in the greenback. However, the flair up of the Greek debt crisis combined with increasingly negative US data threatens to derail any rebound in the USD/JPY. Traders will often use the Japanese yen as a safe-haven currency in times of high market stress and anxiety. Yesterday the USD/JPY fell to a low of 80.89 from 81.88 before recovering to 81.04. The initial support at 81.30 was easily taken out and the next support level rests at 80.30, followed by the May low at 79.60. To the upside the previous trend line off of the May low should serve as resistance as well the May high at 82.20.

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading. ForexYard