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USD/JPY differential?

  • #1
  • First Post: Dec 12, 2006 8:28pm Dec 12, 2006 8:28pm
Has anyone noticed this behavior of late, EUR/USD will be long as hell, GBP/USD also, and USD/JPY will not short, like it should during USD weakness, but just do it's own thing and violate technical rules, etc.?

I'm aware of various pairs' correlation, but it seems really strange, just lately. Correlation varies considerably based on real-time PPP anyway. Could it be carry trades, BOJ intervention, or what?
"The time to act is when others show signs of tire." --W.D. Gann
  • #2
  • Dec 13, 2006 10:54pm Dec 13, 2006 10:54pm
Quoting dukeofdents
Has anyone noticed this behavior of late, EUR/USD will be long as hell, GBP/USD also, and USD/JPY will not short, like it should during USD weakness, but just do it's own thing and violate technical rules, etc.?

I'm aware of various pairs' correlation, but it seems really strange, just lately. Correlation varies considerably based on real-time PPP anyway. Could it be carry trades, BOJ intervention, or what?
1 - fundamentally the euro and the yen are heading in differnt directions.
2- the eurusd is heavily driven by the euro at the moment meaning correlation between non-euro pairs is reduced.

very short term correlation is always going to be there. watch a 1 minute chart and see that sudden volatility of a few pips in the euro will effect the yen vice versa... although the yen has less power to affect the board compared to the euro.
  • #3
  • Last Post: Dec 14, 2006 3:20am Dec 14, 2006 3:20am
Quoting dukeofdents
Has anyone noticed this behavior of late, EUR/USD will be long as hell, GBP/USD also, and USD/JPY will not short, like it should during USD weakness, but just do it's own thing and violate technical rules, etc.?

I'm aware of various pairs' correlation, but it seems really strange, just lately. Correlation varies considerably based on real-time PPP anyway. Could it be carry trades, BOJ intervention, or what?
Nothing strange. We may see two grands on the market: EUR and USD.
About USDJPY.... this pair became to feel influence from USD not only, but also from others when EUR appeared. Earlier pair was more hanging from USD.
For example: you may compare Dow and USDJPY charts before appearance EUR and after.
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