You want to see risk off? Then you want to see the Yen strengthening. You want to see risk on? Then you wish the Yen weakens
FXY (Guggenheim Currencyshares Japanese Yen) is the one to watch if you are interested in long term moves in Gold and stocks. FXY is more or less directly correlated to Gold.. And when panic sets in the markets, you see FXY strengthening beyond normal, and vice versa.
Currently the FXY is at a critical juncture. Having broken below the 200 week & 50 week MA’s in Nov 2016 (and remaining weak for the last 7-8 months), FXY is now knocking at those two levels again (both the MAs are now very close to each other as can be seen from the chart). A break above followed by a surge would be awesome for Gold while it might set an interim top for SPX. Obviously the Yen is not the only indicator that decides market movements but it is certainly very closely correlated with Gold. So watch it at least for some fun!
And if you wonder what is happening with Gold, here is the article I posted on July 28 that explains where Gold is facing a major LT resistance & how it is still stuck in the triangle. Happy trading!
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