USDJPY Dollar/Yen Weekly and Daily Charts

The BOJ controls the markets over the last couple months. The announcement by Japan that they will crank up the printing presses and debase the yen created the recent move higher in equities markets and enabled the SPX to print new all-time highs.  The weaker yen moves the dollar/yen pair higher and equities higher. The easy BOJ money buys U.S. equities pumping the already large dividend, utility, REIT, high-yield, junk, and other asset bubbles that the Fed started to pump to begin the year. It is all one large upside central banker orgy. How fitting that they are wearing the Emperor's new clothes.

We watched the bottom form in the dollar/yen for the last couple years. The weekly chart is textbook pattern-wise, a very good reference. The falling wedge from 2009 through 2011 created the price bottom. Likewise the positive divergence in the indicators provided the rocket fuel.  The orange cup and handle (C&H) formed at the bottom, and pointed to the 95-96 target. Ditto the inverse H&S pattern (yellow lines), which also targets the 95-97 area. Both the inverse H&S and C&H patterns are satisfied so they do not require price to move higher anymore. Indicators are negatively diverged on the weekly chart except for the MAD line so there may be some further topping action at this 100 price level but price should roll over moving forward.

The daily chart provides a close-up look. Negative divergence created each of the three tops as the dollar/yen trek's to one hundo.  The yellow lines show price continuing to test 100, so the highs are matching or higher highs, and the indicators are negatively diverged. There is not much upside juice remaining. Projection is for the dollar/yen to move sideways to sideways lower for the days and weeks ahead.  This is important due to the huge impact the weaker yen has on the broad indexes during March and April.  The BOJ easing creates weaker yen, higher dollar/yen and higher equities. If the BOJ backs away from their jaw-boning, the yen will strengthen, with a lower dollar/yen and lower equities. Thus, if the dollar/yen runs out of gas as the charts above show, the SPX and other major indexes should have trouble working their way higher. Watch dollar/yen closely, now around 99.50-ish and the futures are flatter than a newlywed's souffle. Thus, use 99.50 as a calibration. If the dolar/yen moves higher to 99.55, 99.60 and higher, the broad indexes will march higher today.  If the dollar/yen leaks lower, 99.45, 99.40 and lower, the broad indexes will be selling off.  The BOJ controls the markets right now. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.