Is AUDJPY signalling something for Asian stock indices?

AUDJPY-EEM-HSI-SIMSCI widening

I discussed previously AUDJPY’s high level of positive correlation with EEM, Hang Seng, Singapore index futures.

Jan 2015 - Jan 2016 chart overlay of EEM, HSI, SiMSCI, China A50 and AUDJPY

EEM, HSI, SiMSCI, China A50 and AUDJPY overlay posted on 27 January 2016 | Source: Investing.com

This correlation made its presence felt most strongly during the early January crash. At a glance at the chart below, that correlation remains intact. However there is a widening gap in terms of YTD performance. If their correlation remains valid, then something is wrong with this picture with their widening divergence. AUDJPY is either too bearish as it moves towards 52-week low or EEM, HSI and SIMSCI has some catching up to do.

AUDJPY, EEM, HSI, China A50, SiMSCI overlay on daily timeframe, YTD

AUDJPY, EEM, HSI, China A50, SiMSCI overlay on daily timeframe, YTD

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Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005.   Soh's Twitter account @sohtionghum was ranked #23 out of The Top 70 Twitter Accounts To Follow In 2015 by MahiFX.   Disclaimer notice: "I do not have a financial advisor's license. I am not qualified by any regulator to give financial advice. I do not know you the reader. Your investment means and motive may be different from me. My posts here are based on observations and meant for education. I am not responsible for for any consequence from your actions."
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