Correlation between USDJPY and the U.S. stock market | 10 February 2022

10 February 2022, USD/JPY

USDJPY trading plan:

U.S. investors are snapping up funds that invest in dividend-paying stocks as they search for stable income from alternatives to bond markets, which are being roiled by the prospect of rate rises. Traders bought $6.9 billion in U.S. dividend funds in January, the highest net purchases since October 2006. There has been elevated volatility in global equity markets this year on concerns over higher yields and inflation levels, which tend to squeeze corporate profit margins. Dividend funds are seen as safe and offering some stability in that scenario, as they hold well-established companies that have better pricing power and a track record of providing stable income. This is a good signal for the stock market and USDJPY, which has a correlation with the shares.

Investment idea: buy 115.47 and take profit 115.90.

David Johnson
Analyst of «FreshForex» company
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