Hi Guys,
Looking for opportunities using inverted correlations between Gold and USD/JPY.
The idea is that when US dollar weakens, money flows into safe heavens like Gold and Japanese Yen and this is why their moves are inversely correlated.
In the above scenario USD/JPY made a clear bottom at 105 on Jan the 3rd. The move has been so fast that economists labelled it a flash crash. Yes it was. But it was also the signal that USD/JPY was bottoming at 105.
On the opposite, 1300 could have been a nice top in Gold. But Gold never got to 1300. It arrived at 1298. For 2 weeks the precious metal ranged between 1298 and 1275 (support B). The fact that Gold is now overtaking A means that Gold (in its process of topping) may be still looking for a top higher than 1300. Be careful that this does not mean that USD/JPY will go lower than 105.
This post is a follow up of an idea posted on Jan 11 and already updated on Jan 16 (links to related ideas below).
Here is the link to the moves made by USD/JPY.
Looking for opportunities using inverted correlations between Gold and USD/JPY.
The idea is that when US dollar weakens, money flows into safe heavens like Gold and Japanese Yen and this is why their moves are inversely correlated.
In the above scenario USD/JPY made a clear bottom at 105 on Jan the 3rd. The move has been so fast that economists labelled it a flash crash. Yes it was. But it was also the signal that USD/JPY was bottoming at 105.
On the opposite, 1300 could have been a nice top in Gold. But Gold never got to 1300. It arrived at 1298. For 2 weeks the precious metal ranged between 1298 and 1275 (support B). The fact that Gold is now overtaking A means that Gold (in its process of topping) may be still looking for a top higher than 1300. Be careful that this does not mean that USD/JPY will go lower than 105.
This post is a follow up of an idea posted on Jan 11 and already updated on Jan 16 (links to related ideas below).
Here is the link to the moves made by USD/JPY.
Comment:
In addition to the above please also note that both USD/JPY and Gold were forming a crocodile pattern from A to B and Gold just closed its inverted upper jaw. Please look at the folling charts...
Comment:
USD/JPY crocodile
Comment:
Gold crocodile upside down
Comment:
Adding a green parallel line on the 1st chart
