Now that we’ve got that out-of-the-way ( the Fed’s sill little rate hike, and of course the nearly “not covered” debt ceiling debacle) we can move on. It’s time for more “mind bending macro market analysis” considering that these last few calls have been bang on the money. In short…..the U.S Dollar “plunge” shall continue, as both gold and The Euro continue to move higher. Further riches will be made with this simple concept burned into the back of your skull like a bad tattoo.
Let’s have a quick look at the weekly chart of my old friend AUD/JPY and refresh our memories, as to how this currency pair can help you gauge risk appetite with another simple concept.
AUD/JPY UP = Risk on.
AUD/JPY DOWN = Risk off.
You can see how AUD/JPY has been trading completely flat for the past 10-12 weeks as U.S Stocks have really only taken a small leg higher during the same period of time. U.S Stocks are always ALWAYS the last to go when risk appetite ( and the machines on Wall St ) switch from “buy” to “sell”. Always.
AUD/JPY has been up against very solid resistance for an extended period of time, and if “all was well” would surely have broken through, and climbed higher along side U.S Equities some time ago.
Such is clearly not the case as this currency pair has “literally” miles to fall. And fall it shall.
I am currently tracking this pair but not getting excited about entry “short” until I see a nice solid read candle and a decisive break lower. Even 85.00 and lower to truly seal the deal.
You see how this works right? I’m “tracking / observing” market activity with a pre conceived notion of at least two ( if not two hundred ) things.
- AUD/JPY ( a significant indicator of risk appetite in markets in general ) is trading in a range against significant over head resistance.
- A significant break lower should “clear the field” and is suggestive of a much larger shift from “risk on to risk off” across markets in general.
Eezy Peezy when you have a plan. Do YOU have a plan? There could be 1000 pips below this currency pairs current price.
Damn rights I’m still short USD. Damn rights I still own NUGT. Damn rights I’m killing it long EUR/USD.
Any questions today? I’m back in the saddle.