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

Many of the Yen pairs moved higher today after gapping lower last night.

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!


Source: Tradingview,


Source: Tradingview,


Source: Tradingview,

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:


Source: Tradingview,

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. 

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 or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account