USDJPY correlation with interest rates in back
Historically, USDJPY has had a positive correlation with interest rates. This implies that whenever rates go down, USDJPY follows lower. However, since September this year, rates as seen on the US 10 YEAR YIELD have been rising. USDJPY was falling on USD weakness.
Interest rates are rising as the US Federal Reserve has been providing massive QE and financial help to US businesses for recovery. They are trying to manage inflation with a target of 2%.
Correlation is back
The USDJPY has been moving higher in the past week despite USD weakness suggesting that it's correlation to rates could be back.
The Reflation trade
As soon as the COVID19 Vaccine starts to roll out around the world in 2021, economies are expected to fully recover by 2023. That's just 3 years away. The US 3 YEAR BOND also shows possible recovery with rates rising since July this year.
This is very supportive of my theory that 2021 could see the YEN become weak against the DXY . The 106.0xx is possible target as the level is in confluence with the 0.382 fibonacci level of the previous Bear 🐻 run.
Interest rates are rising as the US Federal Reserve has been providing massive QE and financial help to US businesses for recovery. They are trying to manage inflation with a target of 2%.
Correlation is back
The USDJPY has been moving higher in the past week despite USD weakness suggesting that it's correlation to rates could be back.
The Reflation trade
As soon as the COVID19 Vaccine starts to roll out around the world in 2021, economies are expected to fully recover by 2023. That's just 3 years away. The US 3 YEAR BOND also shows possible recovery with rates rising since July this year.
This is very supportive of my theory that 2021 could see the YEN become weak against the DXY . The 106.0xx is possible target as the level is in confluence with the 0.382 fibonacci level of the previous Bear 🐻 run.
