Is the $EURJPY Telling Us Something?
- Posted by zerobeta
- on December 17th, 2009
One currency pair that many traders watch is the $EURJPY. It’s historically been correlated with equity markets and is a good proxy on risk taking in the marketplace.
Back in March, two weeks before equity markets rallied, the $EURJPY started moving up, perhaps signaling the rally. Since then the two have moved pretty much in lockstep – until recently.
Below is a chart (click to enlarge) showing how recently the two have diverged. The $EURJPY is selling off whereas the market has been trading in a range off the year’s highs
Surely, the $EURJPY can play catchup, and since the dollar has become the carry trade currency of choice old relationships may not hold. Regardless, this is a relationship to watch.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
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Justin is a Product Director at StockTwits. For the last 5 years he has had an active interest in financial technology, especially in the area of media. You can follow Justin Paterno (@zerobeta) on StockTwits... More » -
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