This is where it starts to get really interesting. The Yen is approaching a major resistance level for the 4th to 5th time depending on how you look at a graph. The graph itself is beginning to form a classic Ascending Triangle Formation. If you believe in technical patterns watch out for it. Should this pattern fulfill itself, then, we can expect a smaller and smaller trading range from Yen and anticipate a smaller and smaller trading range from the S&P 500, as well. The interesting part is if and when the Yen breaks or completes the technical pattern. If the Yen completes the technical pattern, then, we expect Yen to rise towards the $0.009975-$0.010006, level and the S&P 500 to head towards the 1914, range; if Yen breaks the technical pattern and falls and closes below immediate support, then we can expect the S&P 500 to continue towards and beyond the 2000, level.
It certainly appears ready for a breakout one way or another. It's painted itself into a tight little range. Same with the $USD. It seems like one of the three major currencies will need to go into bullish mode. The Euro looks like it's breaking down, IMO so that would leave Yen and $USD to figure out who will be in an uptrend for the next several weeks to months.
why strong Yen will indicate weak SPY market? Just curious about all these FX trades. Never know how to read these. but , anyway, I am shorting AUD.USD right now.
Read Marc Chandler, marctomarket.com , as a starting point. He scrapes macro headines/issues daily for many countries and opines.
FX is a measure of capital flows between risk currencies/assets and safety. A strong yen means that investors are pulling money from other risky/high return assets (equities) and putting them into safer vehicles (yen and bonds)
FX is all about yields. Interesting that JPY hasn't been a dollar play, an equity play for awhile, it's been driven by the yields, usually the 10yr. Maybe this will change above 102, but maybe not with BOJ continuing to be the buyer in it I personally think with QE "winding" down, we will actually start to see the effect sooner than later in the bond world, which should help with volatility in the FX world. I wouldn't be suprised when tha balance sheets change more for the fed, even as early as Sept, of that brings back FX a little more then it has been. Nice move in USD/CAD in Friday though