Is Gold Following JPY Or Is JPY Following Gold?
Skerdian Meta • 1 min read
Yesterday, I talked about a possible reversal in gold after it had formed a bearish chart setup. The previous daily candlestick had closed as a doji, while yesterday´s candlestick was closing pretty bearish.
Then I switched to USD/JPY daily chart and saw the exact same thing, but upside-down. USD/JPY had formed a doji on Monday and on Tuesday it climbed around 100 pips.
A bullish candlestick followed the doji which is a bullish signal
It looked like safe haven currencies were going hand in hand, first up and now down. So, to answer the question in the title, it seems the safe haven currencies are following market sentiment.
But the other question is, why did the sentiment change or, did it not change at all and this is just a retrace?
The US health bill that passed through Senate yesterday might have had some positive effect on the market sentiment. Yet, I can't be sure that the sentiment has changed until we see yesterday´s move continue further today.
This may well be some position squaring before the FOMC statement later in the evening. Gold has extended yesterday´s move, so let´s see if USD/JPY will continue higher up or return back down and head for 108.