Uncle Buck vs. Johnny Yen (and Au, Ag & T Bonds)

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  • Post category:Currencies

Not being a casino patron I don’t go to casinos and I don’t often look at or care about Forex.  But USD/JPY is special, because of its recent and current macro implications.

A year ago we were managing the topping and eventual breakdown in USD/JPY as it turned its trend down in losing the support of the weekly EMA 50.

usdjpy weekly chart

But along the way we also introduced a monthly chart so we could be aware that a support area was at hand.  After a few months of grinding around (as gold topped and stocks worked through the anxiety of the Brexit → pre-US election period) support held and launched a big rally in USD/JPY.

usdjpy monthly chart

Why is it important?  Because in this light, Uncle Buck is risk ‘on’ (not always the case on the macro) and Johnny Yen is risk off.  Or more to the point, JPY/USD is risk ‘off’, almost in lockstep with gold and long-term Treasury bonds.  Silver apparently thinks its something else right now, but that’s another story all together.

jpyusd, gold, silver and 10 year bonds

I realize I am not making much of a point here, but well, it’s a free (and 100% ad-free) site and my obligation is not to be profound for the public, it is to do hard work looking at things from multiple angles and make sensible conclusions on probabilities in the weekly report and in subscriber updates.  But looking at the above I can envision some thought bubbles you might have popping up in your head.

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