We are at a cyclic crucial moment for UsdJpy, especially if we look at this change by relating it to the US 10-year rates.
The cycle of lows at 93 weeks that marks the US interest rates is right in the first week of April. Not necessarily this cycle determines the end of a bearish trend resulting in rates reversal, but it certainly is a time window that creates the premises for a period of rising or stability of rates for a few months (see red circles ).
How does this reflect on UsdJpy? The graphic analogy between the two financial variables is evident and therefore we should hardly see UsdJpy breaking area 98/99 in the coming weeks, while the chances of a new wave of weakness on the Japanese currency will rise significantly. Obviously these cycles (and correlations too) will stop working at some point, but thanks to the length of this model it is worth it into account (Graph source: Bloomberg).
The cycle of lows at 93 weeks that marks the US interest rates is right in the first week of April. Not necessarily this cycle determines the end of a bearish trend resulting in rates reversal, but it certainly is a time window that creates the premises for a period of rising or stability of rates for a few months (see red circles ).
How does this reflect on UsdJpy? The graphic analogy between the two financial variables is evident and therefore we should hardly see UsdJpy breaking area 98/99 in the coming weeks, while the chances of a new wave of weakness on the Japanese currency will rise significantly. Obviously these cycles (and correlations too) will stop working at some point, but thanks to the length of this model it is worth it into account (Graph source: Bloomberg).
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