EUR/USD slips again and here is why

The slide in the USD/JPY this morning and not long ago tested the 150 handle and that move has impacted all the major Yen crosses, as noted in the previous update. So, the EUR/JPY has taken a real hit too. The EUR/JPY has fallen back to a fresh interim low at 162.21. That is more than 1300 pips below the 2024 and record high at 175.43 set earlier this year, less than a month ago. The slide in the EUR/JPY (and GBP/JPY too) has further unwound the massive Yen short carry trade that has characterised the main FX trade of 2024. This is all about forced liquidation folks and it has been pretty brutal in recent days and none more so than today. This has also dented the EUR/USD. That is because of price discovery forcing EUR/USD lower at the same time. It remains to be seen, if the USD/JPY will rebound much from here and if that will have an opposite impact on the EUR/USD. However, if it does not and the USD/JPY rebounds significantly, then the EUR/USD could be at risk of a deeper decline below 1.0798- we shall see on that. The EUR/USD is just now at 1.0814