Dow Closes Down Over 3.25%, but USD/JPY is Only Down 0.45%
Joe Perry August 15, 2019 1:23 AM
As fears of a global slowdown and the possibility of a recession increase, equities sold off though out the day. The Dow Jones Industrial Average closed down over 800 points, the biggest one-day selloff of the year.
After the DJIA retraced to the 61.8% Fibonacci retracement level from the July 31st high to the August 6th low, a flag pattern was formed. Today prices broke lower out of the flag pattern and the index now has a possible target of 24,380 in its crosshairs.
Source: Tradingview, FOREX.com
Typically, when equities have a “risk off” day, USD/JPY tends to follow Equity Indices lower. However, today, while the Dow was down over 3.25%, USD/JPY was down only 0.44%!
Source: Trading View, FOREX.com
In addition, while DJIA had an extremely bearish candle on the day, USD/JPY actually had an inside daily candle (which is neutral) and held support at 105.60!
Source: Trading View, FOREX.com
Is USD/JPY telling is that the move lower in DJIA was a bit overdone today? That may be the case. Australian Employment data is due out later, which could act as a catalyst for a move. If stocks bounce during Asia or Europe, watch for USD/JPY to move higher, and possibly at a faster pace, than stocks.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.