Yen depreciation is inevitable


Intermarket analysis between USDJPY, Gold spot and the US 10yr yield.

As per charting, USD/JPY and bond yields exhibit a positive correlation. Gold & 10-year yield exhibit a negative correlation. Gold ad USDJPY exhibit negative correlation.

Since September 2015 this correlation strengthens and we can see on the chart that tops and bottoms formed precisely in the same magnitude.

Recently, all three asset classes have given a break from the patterns. After the observation, it seems that Gold gives the first indication for a change in trend and then it is followed by other two asset class.

So in the near term, dollar/yen will continue the uptrend and it could test the 117 and then 119 levels.

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About Author

Mohnish shah is based in India and has been in the Forex Market since 2011. He is the Research Analyst and expertise in Elliott wave analysis. Mohnish carries vast experience of analyzing World Equity, Currency and Commodity markets using techniques like Elliott Waves, Time Cycles, and momentum tools. He has worked on trading models, Risk management and handle the portfolio of HNI clients. He has written reports extensively on Global assets including Currencies, Precious Metals, Energy, Bonds, across multiple time frames.

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