The fall in the USDJPY has had a negative impact on US stocks recently with the thought that the carry trade would lead to the unwind of funding stocks with JPY. Whether true or not, it can be the “story” that causes a reaction.
The USDJPY has moved lower on the report that the Bank of Japan may raise rates to 0.25%, has contributed to a fall in the US stocks led by the Nasdaq. Anxiety about earnings this week may also be a concern.
The Nasdaq index has now moved down over -1.0% and is currently down – 1.05 %. The price is also back below the 38.2% of its move up from the April low at 17353.82.
Note also that the corrective high off the low last week stalled between a swing area at 17494 to 17544 (yellow area and renumbered circles on the chart above). That is now a ceiling area that would need to be broken to increase the bullish bias (in addition to the 38.2% retracement)
The price is now down -1.19%.
This article was written by Greg Michalowski at www.forexlive.com.
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