Saturday, July 14, 2018

JPY/USD Yen Daily Chart; Death Cross

The yen weakens against the dollar creating a death cross. The 50-day MA stabs down through the 200-day MA on the JPYUSD daily chart. As always mentioned, usually price will bounce when the death cross occurs (yen strength) but the yen will weaken in the weeks ahead if the death cross remains in play. Japanese shareholders cheer a weak yen since it will pop their Nikkei and Topix indexes higher. The collapse in the yen the last few days corresponds to the NIKK jumping from  21500 to 22700, a big 1,200 points or +5.6% (last week the Nikkei Index gains nearly +4%). The Japanese are drinking sake and singing, "Happy Days Are Here Again" as the yen commits hari-kari.

Conversely, the dollar/yen (USDJPY) is in a golden cross with the pair up to 112.33 tagging the 112.80 level. A higher dollar/yen pair reflects the weakening yen. Think of high school math class and fractions; remember the numerator (top number) and denominator (bottom number). For the dollar/yen currency pair (the inverse of the chart above); when the denominator moves lower (weaker yen), the overall number for USDJPY moves higher (towards 113). When the denominator moves higher (stronger yen) the overall number moves lower towards 111.

The US dollar index chart, USD or DXY, dixie, shows the golden cross occurring in early June a month ago (stronger dollar). So the dollar/yen golden cross occurs now (stronger dollar weaker yen) along with the yen death cross shown in the chart above (weaker yen). 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. 

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