Tuesday, October 6, 2009
GBP/JPY Broke Down as Expected; October 6, 2009
Attached is just a follow up to the chart I posted last night on the GBP/JPY showing a 4th wave unfolding and expected decline. It's dropped over 150 pips at one point since posting. What's strange is that this is just a combination of the GBP/USD and the USD/JPY. Both of the pairs are showing weakness, yet the EUR/USD is rallying strong and is probably on its way to a new high above 1.4850. This diverging behavior is peculiar and perhaps signaling a fractioning of the overall global market as far as risk appettite. It also tells me that the stock market rally is probably just based on the the dollar falling (EUR/USD rallying). When the dollar finds a nice solid bottom and rallies hard, the stock market should lose its last ditch ally in holding up its rally.