We have an interesting development in our ongoing series on the Euro/Yen currency cross, with the Euro bull flagging exceptionally well on the weekly timeframe and currently threatening a secondary breakout. The Japanese Yen has weakened virtually across the board as the Nikkei surges in Tokyo, part of that inverse relationship between the currency and stocks.
Broadening that analysis out further, in recent years a strong Euro and weak Yen have often correlated with higher equity prices in the U.S.. After last week’s price action in America, it will be quite interesting indeed to see if these correlations remain intact or instead begin to diverge, if U.S. stocks face a deeper correction.
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That picture rocks.