Gold is one of the most important asset class which investors prefer during financial crisis time. Both gold and yen share the status of Safe-haven. The yellow metal and USDYEN are inversely related to each other.
In the past six months, gold was one of the best performers and jumped more than 20% due to the ongoing trade war between US-China and a dovish rate cut by major central banks especially Fed.
Correlation between Gold and USDJPY
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Gold-USDJPY 3 month correlation |
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XAUUSD |
USDJPY |
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XAUUSD |
100% |
-70% |
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This shows that gold and USDJY are -70% correlated and r value -0.70 shows the relationship is strong. Technically, USDJPY is trading slightly higher and any convincing break above 107 confirms minor bullishness. The decline from 112.40 will come to end around 104.40 only if closes above 107 level.
The gold is holding well above $1500 and any major weakness only below $1479 level. In the weekly chart, RSI is in the overbought zone and the chance of dip till $1500/$1480 likely.
It is good to sell on rallies around $1542-45 with SL around $1555 for the TP of $1480.
