Is it possible that the inverse correlation between the yen and the stock market is about to end. Stocks are having a modest rally today but the dollar has weakened versus the yen. Perhaps the weaker US retail sales report prompted some dollar selling. We had acquired a long dollar short yen at 95.50, hoping for a rally back to the 97 level, however the rally fell short of expectations, so it is best to exit this trade.
The USD/JPY 4H charts shows some signs of weakening, and prices are close to breaking the uptrend support in place since early July. Is this market suggesting that a global equities sell off is pending, or is there something else in play. The CME futures open interest has been declining so there seems to be a lack of conviction here. Does a weak US economic recovery help or hurt the dollar? Prefer to watch this pair for a day or two.