Yen Ready to Test Long Term Weakness

The Yen has remained weak against the U.S Dollar. While the Nikkei Index has seen cautious selling today, the U.S Dollar has continued to strengthen versus the Yen which is noteworthy.

Yen’s Weakness Appears Trend Worthy

The Yen has continued to trade weaker and it is approaching the 113.00 level which is important psychological resistance.

The Yen is a notorious trending currency. And its recent weakness against the U.S Dollar has developed as the Nikkei Index has put in a steep rise in value. If the U.S Dollar continues to be rise against the Yen it could signal further tests of value to come.

Yen’s Turnaround Compelling

While the Yen has been stronger the past two months, in early July the Yen was trading near 114.00 against the U.S Dollar – which highlights the mid-term turnarounds it has produced.

The Yen weakness in early July, then it emerging strength and now its return to weakness show the dynamics which have been seen in the Asian markets the past three months.

Yen Proving Speculative and Fast

The Yen is likely to remain speculative. Traders should understand the Japanese currency has a history of moving fast. Support for the Yen in the short-term may be around 112.00. But if the Yen gets weaker its next important resistance level could be 113.50 against the U.S Dollar.

Investors have been active on the Nikkei and Topix Indexes. Both exchanges have seen cautious selling today, but the Yen has remained weaker against the U.S Dollar.

In the short term, we believe the Yen may be negative. Mid-term and Long-term we are unbiased.

Yaron Mazor is a senior analyst at SuperTraderTV.

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