Chart Of The Day: Japanese Equities Soar, Leaving The Yen Behind
Investing.com | Apr 25, 2017 07:01AM ET
by Pinchas Cohen
Since March 10, both the TOPIX, the leading Japanese index, and the country's currency, the yen have been trending down. Despite the yen’s advance over the past couple of days, it remains trapped within its falling trading channel.
Yesterday’s trading formed a Shooting Star, a Japanese candlestick that reflects the bulls' inability to maintain their advance, a bearish victory. The fact that yesterday’s high reached the top of the falling channel, then fell, confirms that sellers are waiting at the top of the channel. Additionally, today’s gain has not overcome this resistance level, at 110.64.
While the yen is on a short leash, the TOPIX has soared past the resistance of the channel top, which suggests a reversal in the supply-demand balance of powers.
Should the Japanese currency continue to weaken, that will only further boost Japanese shares, as they would be rendered that much cheaper. This could create a delicious cycle for equities.
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