These days it makes little sense contemplating every single “little move” in any number of currencies, as forex markets are more or less flat / stagnant. Sure the Brexit did it’s thing and the pound (GBP) got hammered, and sure the Japanese Yen (JPY ) has been on a tear since big banks and large-scale traders have clearly been ditching their Carry Trades – in preparation for a larger scale fall in risk assets ( likely to follow post U.S Election ).
So what’s a trader to do?
Many have been suggesting that the long-term “double top” in Tech stocks / Nasdaq could very well be what markets are shooting for, prior to pulling back….and it looks like we are just about there.
What might throw a number of you for a loop, will be to keep a close eye on USD as U.S Equities pullback.
Traditional thinking would have the U.S Dollar rise ( as U.S Equities are sold and “cash is then raised” ) but we’re not much for traditional thinking ’round these parts. Nothing has changed with respect to the longer term idea that USD is set for a much larger fall.
I would take a very serious look at “any currency” Vs JPY on the smallest indication that “risk aversion” rears its ugly head as…..money is gonna pour back into the primary funding currency of this charade ( that being Japanese Yen ).