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2025-07-29 17:48:49
[A Sudden Change in the Forex Market? EUR/JPY's "Life and Death Line" Amidst Dollar Short Covering] ⑴ On the afternoon of July 29th (Beijing time), forex traders were actively taking profits from the dollar's decline, a move that could signal continued pressure on the dollar. ⑵ A further pullback in the stock market from its recent record highs would also impact currency traders' betting behavior, as strong equity markets have previously encouraged speculative trading. ⑶ As long as the stock market remains in a bull market, it will support risk-taking or investment appetite, prompting traders to re-establish their currently trimmed dollar short positions. ⑷ Euro long positions have not yet reached the scale that has triggered reversals in the past. Profit-taking will reduce euro long positions and reduce their impact on the EUR/USD uptrend. ⑸ EUR/USD has only reached a minor retracement target of 1.1538 (38.2% Fibonacci retracement) from the May-July rally, potentially forming the basis for a resumption of the uptrend, potentially breaking through the 1.1830 high reached in July this year. 6. The situation with USD/JPY is slightly different. Long positions in the yen were once very large, which led to a large correction recently, which has almost retraced half of the decline this year. 7. If long yen positions can achieve profit-cutting without USD/JPY breaking through 150, traders may sell yen again.
