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Does Today’s Move in XXX/JPY Signal Higher for Stocks?

Many of the Yen pairs moved higher today, in particular the commodity currencies vs the Yen, after gapping lower last night on the Asian open.  Most of the pairs broke down out of bearish formations and came back to retest those levels today.  Does that mean we had a false breakdown in these XXX/JPY pairs?  Looking at some of the commodity currencies vs the Yen, not only did these pairs trade higher back into the short-term range, but they are testing the top trendline of the range!

NZDJPY


Source: Tradingview, FOREX.com

AUDJPY


Source: Tradingview, FOREX.com

CADJPY


Source: Tradingview, FOREX.com

On Friday, the S&P500 also broke lower out of a bearish pattern.  The S&P500 usually moves together with yen pairs.  The large equity index traded back into Friday’s range as well.  However, it did not come anywhere near the top trendline, as the Yen pairs did:

S&P500


Source: Tradingview, FOREX.com

What does this mean? 

1)Although stocks bounced, they remain heavy

2) If stocks move lower, XXX/JPY may move lower in a hurry

3) Stocks still have another 60 HANDLES on the upside to reach the upper trendline (up to 2940).  If stocks do break higher, the commodity currencies vs the yen may not move higher as fast as stocks. 


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