The S&P500 and AUD/JPY are both heading up to test key resistance levels. The pair have been out of sync for much of this year but they’re worth watching as they test these resistance levels to see if they return to positive correlation.
The 15-year chart below shows that the AUD/JPY and S&P500 are generally highly positively correlated.
An exception has been for the last few months of this year; as highlighted below:
The above chart has been expanded to show this divergent period more clearly. Much of the last 6 months has been a period where the two have been, pretty much, out of sync:
Both the S&P500 and AUD/JPY are edging higher into key resistance levels and it depends, of course, how they react at these levels but their reaction could see them get back into some kind of groove with each other. Thus, I think it is worth watching to see how the S&P500 and AUD/JPY make or break at these levels.
S&P500: the 2,135 level is a recent breakout level and one that is holding for the time being. There is also a more recent triangle pattern brewing on the daily chart time frame and these are the trend lines to watch for any make or break activity:
S&P500 30 min:
AUD/JPY: the 80 level is a long-term S/R level, as the monthly chart reveals, and price is now edging back up towards this major level so watch for any make or break from this 80 zone:
AUD/JPY 30 min:
Summary: The AUD/JPY and S&P500 have been divergent for much of this year but both are currently ticking higher and up into resistance. Watch to see how both react at these levels and whether they get back into sync with each other.