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Another chart on the AUDJPY – SiMSCI divergence theme

Previously I observed here that AUDJPY and SiMSCI displayed a high level of positive correlation (HSI as well) on chart going back to 2008. Since the beginning of 2017, they have diverged.

This chart below of AUDJPY – SIMSCI (SG30) showing high level of positive correlation and then near term divergence was published on 06 February 2018.

SiMSCI to AUDJPY divergence in weekly chart 2008 to present

This weekly chart was published on 06 February 2018

Add this 3M chart (one quarter per candle) of the same theme. AUDJPY on the top panel and SG30 below. What’s notable is that AUDJPY appears to be stepping down to a lower range where it traded between 2010 – late 2012 while SG30 remains at lofty levels.

AUDJPY might or might not fall immediately – it could retrace find resistance. By stepping down to this lower range higher however, there is a high probability we will see a lower move by the pair at a later point in 2018. So unless SG30 breaks it’s connection to AUDJPY once and for all, I guess there has to be a convergence sooner or later.

AUDJPY 3M chart from 2004 to early May 2018

AUDJPY 3M chart from 2004 to early May 2018 | Source: Tradingview.com

 

 

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Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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