FOREX THEORY
Trading the Yen Crosses
The JPY is one of the more popular cross currencies and it
is basically traded against all of the other major currencies.
EUR/JPY has the highest volume of the JPY crosses according
to the latest Triennial Central Bank Survey from the Bank for International
Settlements.
GBP/JPY, AUD/JPY, and NZD/JPY are attractive carry trade
currencies because they offer the highest interest rate differentials against
the JPY.
When trading JPY currency cross pairs, you should always
keep an eye out on the USD/JPY. When key levels are broken or resisted on this
pair, it tends to spill over into the JPY cross pairs.
For example, if USD/JPY breaks out above a key resistance
area, it means that traders are selling off their JPY. This could prompt the
selling of the JPY against other currencies. Therefore you could expect to see
EUR/JPY, GBP/JPY, and other JPY crosses to rise as well.
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