Does the gbp/jpy eur/jpy follow the DOW? | Forex Factory

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Does the gbp/jpy eur/jpy follow the DOW?

  • #1
  • First Post: Aug 27, 2007 3:14pm Aug 27, 2007 3:14pm
I notice that when the dow is down alot of the currency crosses are down when the dow rallies the crosses go up. But I do not totally understand the correlation or relation can someone please explain?

CS
  • #2
  • Aug 27, 2007 3:19pm Aug 27, 2007 3:19pm
gbp/yen yes, strong correlation.
  • #3
  • Aug 27, 2007 3:39pm Aug 27, 2007 3:39pm
Quoting trader1976
I notice that when the dow is down alot of the currency crosses are down when the dow rallies the crosses go up. But I do not totally understand the correlation or relation can someone please explain?

CS

Its called the famous carry trade: investors borrow yen, i.e sell it to fund stock positions. in the recent subprime storm inverstors unwinded their positions, i.e they sold their stocks because they were afraid and didnt want to hold risky positions and bought back the yen
  • #4
  • Aug 27, 2007 3:52pm Aug 27, 2007 3:52pm
http://i58.photobucket.com/albums/g2...bpjpyvsdow.png
Is your SL my TP?
  • #5
  • Aug 27, 2007 6:29pm Aug 27, 2007 6:29pm
I heard seasoned traders say 'follow the dow', but I always keep some dramamine handy

Quoting trader1976
I notice that when the dow is down alot of the currency crosses are down when the dow rallies the crosses go up. But I do not totally understand the correlation or relation can someone please explain?

CS
{Link removed }
  • #6
  • Aug 27, 2007 6:33pm Aug 27, 2007 6:33pm
There is a good article that better explains what i was going to write at: http://www.investopedia.com/ask/answ...orrelation.asp

Happy trading.
MM

Quoting trader1976
I notice that when the dow is down alot of the currency crosses are down when the dow rallies the crosses go up. But I do not totally understand the correlation or relation can someone please explain?

CS
The greatest achievements are those that benefit others....
  • #7
  • Aug 27, 2007 6:33pm Aug 27, 2007 6:33pm
kenmania:

Thanks for the chart...
  • #8
  • Nov 27, 2007 2:52am Nov 27, 2007 2:52am
Quoting mmbmusa
There is a good article that better explains what i was going to write at: http://www.investopedia.com/ask/answ...orrelation.asp

Happy trading.
MM
Just wanted to thank you for the link...exactly what I have been looking for
  • #9
  • Last Post: Dec 21, 2007 2:46am Dec 21, 2007 2:46am
  •  FxChi
  • | Joined Dec 2007 | Status: Cash Rules Everything Around Me | 749 Posts
Thanks for the chart. That's really an interesting piece of information. Next question - the pair seems to move more during the Europe session. Let's say the DOW closes -200 points, does G/J appear bearish during the American session, and then even more bearish European session (and this is generally speaking, I know there's no absolutes in FOREX)?
"Wishful thinking dies hard." Igor T.
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