USD/JPY Charts

This is just one piece of many in the puzzle of the market, but one we have had our eye on recently, USD/JPY which SPX futures are tightly correlated to today.

 1 min chart of USD/JPY vs. ES / SPX futures (purple) nearly perfectly correlated.

The issue I mentioned earlier in the week was the air bubble between ES's price and USD/JPY's reality, I suspected that the lack of support (air bubble) would revert back down to the correlation which can be seen on longer charts like this15 min.

 The issue we have been watching develop is the 5 min charts which were only slightly separated from the longer term 15, 30 and 60 min charts, all suggesting a longer term move down for USD/JPY, but still the near term timing charts needed to turn more negative and make their move. This is the 5 min $USDX leading negative

And the large Yen leading positive, both would suggest the $USD moves down, the Yen up and that sends the USD/JPY lower, which Index futures are correlated to, meaning Index futures lower as well.

 This is where the longer term forecast for USD/JPY starts, around the 15 min charts as this $USDX 15 min is also leading negative.

And the 15 min Yen is leading positive, again suggesting the same thing.

 And the 60 min $USDX chart has turned from in line to negative, it was already negative on 30 min charts which have now migrated to the 60 min chart, meaning the divergence was strong enough to do so.

And the Yen 60 min was already positive.

This means not only is the USD/JPY heading down near term, but it's longer term implications are not good either, which has a similar effect on the market.

I wouldn't say anything is a straight line decline, but I would say this is the dominant trend.