Hello traders! Today we will talk about positive correlation between stocks and xxx/jpy cross pairs, while we are in RISK ON sentiment.
Well, as you know, stocks are in uptrend and there can be room for more upside once a bigger correction fully unfolds. At the same time, xxx/jpy pairs are usually in positive correlation with stocks that can be clearly seen in the first chart above!
The best examples at this stage are Dow Jones and AUDJPY, where we see a potential bullish triangle in progress which may take some time, because we still see an unifinished five-leg A-B-C-D-E sideways movement. Currently we are observing a three-wave (A)-(B)-(C) rally to the upper side of a triangle range for wave D, from where we may see another sell-off for wave E and once a wave E completes, this is when a big triangle can be finished that can push the price back to highs!
These triangles are valid while price keeps trading above blue wave A swing low and bullish confirmed can be only above blue wave B swing high! That said, we are patiently waiting to see if the triangle will unfold as we wish!
Trade well!
Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.
Agree with TomPower lol I got lucky on shorts this week but it's getting damned Bullish I reckon it might surge through 28 May (Gann: Trend changes in May 20-28).
TomPower
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Been killed on my shorts, so keep trying to pick the tops. This looks like a buy, who the hell am I listening too!!