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The U.S. Dollar has declined against the Yen for the majority of the past 30-years, reflected in the chart above. An important high in the US$/Yen took place back in 2007, as well as a high in the S&P500. Now the US$/Yen is facing a 30-year resistance line at (2) in the chart above.
Why could this line be important to the next major move in the S&P 500? The inset chart in the upper right reflects that since mid-2011, the S&P 500 and US$/Yen have a high degree of correlation.
King Dollar to the Yen is now at a test it hasn’t had in 30-years…a key test of resistance!!! A breakout at (2) would suggest higher prices for SPY. Keep a very close eye on the US$/Yen in the upcoming weeks!!!
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50% retracement level of the fall from 2007 to 2011 at 99.74 as well. Jpy bulls must be near zero.
Funny how USD/JPY reaches this falling resistance just at the same time as the SP500 is just 5 points below slightly rising resistance connecting 2000 and 2007 highs….