psychology of trading

So you are looking for guidance (long pause)……………Completely understandable.

You’ve got the entire planets combined libraries / resources at your fingertips and nothing but time on your hands ( sitting in some cubicle somewhere surfing on “company time” ) yet….the markets still keep you guessing.

I can assure you – you are not alone.

If one truly “chooses to succeed” at any given discipline, you’d have to imagine the amount of time and effort required to do so no?

Take an Olympic athlete for example, spending literally “years and years” training if only to be given “the opportunity” to strut their stuff on the world stage, then “thrashed” in the qualifiers and “sent packing” before the games really even start. Talk about a disappointment.

Where they looking for an “easy ride”? Did they expect “someone else” to do the work?

Killer is……the athletes “did the work” and “still” got their asses kicked before the show even started.

I’ve seen supposed “gold gurus” lose everything ( as well as their entire subscriber base), as well as “NY stock picking legends ” get their clocks cleaned ( and even more so coming soon ) clinging to a single / pathetic trade plan based solely in the continued obliteration of the U.S Dollar so…….

If you are looking for guidance…fair – I can help you with that (to a certain degree). If you are looking for a “free ride” you’ve really got to ask yourself….

YOU ARE SURFING THE INTERNET TAKING ADVICE FROM 16 YEAR OLD BOYS POSTING FROM THEIR PARENTS BASEMENT SUITE IN MINNESOTA!

Start taking control of this “for yourselves”.

The Brutal Reality of Forex Mastery

Stop Chasing Signals and Start Reading Markets

Here’s what separates the wheat from the chaff in this game: understanding that every single currency pair tells a story about global economic power shifts. While you’re busy hunting for the next “guaranteed” EUR/USD signal, institutional traders are positioning themselves based on central bank policy divergence, yield differentials, and geopolitical chess moves that won’t hit mainstream financial media for weeks. The Federal Reserve’s hawkish stance doesn’t just affect USD strength – it creates ripple effects across emerging market currencies, commodity pairs, and safe-haven flows that amateur traders completely miss because they’re focused on 15-minute chart patterns instead of the bigger economic narrative.

You want real guidance? Start correlating currency movements with bond yields, inflation expectations, and capital flows. When the 10-year Treasury yield spikes, watch how it decimates carry trades in AUD/JPY and NZD/JPY. When risk-off sentiment hits global markets, observe how Swiss Franc and Japanese Yen strengthen while commodity currencies get obliterated. This isn’t rocket science – it’s understanding cause and effect relationships that drive trillion-dollar currency movements.

The Dollar Obliteration Myth

Let’s address the elephant in the room that’s been crushing “dollar doom” prophets for over a decade now. Every economic crisis, every geopolitical tension, every inflation spike brings out the same tired narrative about USD collapse and precious metals salvation. Meanwhile, the Dollar Index keeps grinding higher during genuine crisis periods because – surprise – global investors still flee to U.S. Treasuries when uncertainty hits. The reserve currency status isn’t just some arbitrary title; it’s backed by the deepest, most liquid bond markets on the planet and a military that can project power anywhere within 48 hours.

Those “NY stock picking legends” mentioned earlier? They’ve been betting against American economic resilience while major currencies like the Euro face existential energy crises and structural banking sector weaknesses. The British Pound learned this lesson the hard way during the Truss administration’s fiscal disaster. Currency markets don’t care about your political preferences – they respond to fiscal discipline, monetary policy credibility, and economic fundamentals. Period.

Institutional vs. Retail: Why You’re Always Late to the Party

Here’s something your YouTube forex guru won’t tell you: by the time retail traders are piling into a trend, institutional money is already planning the exit strategy. Major banks and hedge funds don’t trade breakouts on the 4-hour chart – they create the conditions that cause those breakouts through massive position accumulation over weeks or months. When JPMorgan’s currency desk starts building a significant short position in GBP/USD, they’re not doing it because of some technical pattern. They’re positioning ahead of Bank of England policy shifts, Brexit-related economic data, or sovereign debt concerns that retail traders won’t recognize until the move is 80% complete.

The real money flows happen during Asian and London sessions when most retail traders are asleep or stuck in traffic. Currency interventions, central bank communications, and major economic releases create volatility that professionals capitalize on while retail accounts get stopped out. If you’re serious about this business, start tracking positioning data from the Commitment of Traders reports and understand how commercial hedgers versus large speculators are positioned in currency futures markets.

Building Your Economic Intelligence Network

Forget about finding the perfect trading system – start building your understanding of global economic relationships that drive currency valuations. Monitor central bank meeting minutes, not just the headlines. Understand how oil price fluctuations affect the Canadian Dollar, Norwegian Krone, and Russian Ruble differently based on their respective economic structures and monetary policy frameworks. Track capital flows between developed and emerging markets, because when global growth concerns emerge, currencies like the Turkish Lira, South African Rand, and Brazilian Real get hammered regardless of their domestic fundamentals.

The harsh truth is that successful currency trading requires the same level of preparation and continuous learning that any other professional discipline demands. You wouldn’t expect to perform surgery after watching medical videos online, yet somehow forex markets are supposed to be different? Take responsibility for your education, stop looking for shortcuts, and start developing the analytical skills that separate professionals from gambling addicts with trading accounts.

I like to take a good punt “once in a while” just like the next guy.

When you’ve got your potential losses accounted for ( with a stop in place ) or if you’ve got that “little extra” in a secret trade account somewhere fine. You know what you’re doing. It’s fun. It keeps this from being entirely about “strategy and math” – and for many it also provides a “lil adrenaline” where possibly a “lil adrenaline” is needed.

You know you are gambling. No two ways about it. It’s a 100% complete gamble with such a macro “risk event” on the horizon.

Have fun with it. If you can afford to.

Now the question of the potential outcome “should” the U.S Government ( with absolutely no one else on the planet to blame other than themselves) actually push this “past” the deadline of Oct 17th ( which actually isn’t a deadline at all – but works for the purpose of this completely “self engineered stunt”) and actually default?

Even better question – what if they wait til the last-minute and then “don’t” make complete jack asses of themselves (only to do it a couple of weeks later), save the day, only to dig themselves a couple trillion deeper into the hole?

Either way – it’s a no win. Ooops…I digress – the post was about gambling.

It’s a joke. It’s an embarrassment. It’s 100% completely ridiculous ON TOP of ridiculous as…….potencial “global war” couldn’t do it……but single handedly the U.S Government will essentially “take itself” down. Unreal. And “not at all by design” eh? Gimme a break.

Oooops….

Regardless……if you think you’ve got a handle on markets these days ( which I seriously doubt) and have a couple extra dollars burning a hole in your pocket – go for it. Gamble away.

Question is  – What’s your angle then? You buying or selling on the news?

Reading the Tea Leaves: Currency Chaos and Crisis Opportunities

The Dollar’s Double-Edged Sword

Here’s the thing about USD during these manufactured political circus acts – it becomes the ultimate contradiction. On one hand, you’ve got the world’s reserve currency potentially tanking because politicians can’t figure out basic arithmetic. On the other hand, when global uncertainty hits, where does everyone run? Straight back to the dollar. It’s like watching someone set their own house on fire and then complaining about the smoke. The DXY becomes this schizophrenic beast, whipsawing between safe-haven flows and fundamental weakness faster than you can blink.

Smart money knows this dance. They’re not sitting around wringing their hands about congressional theatrics. They’re positioning for the inevitable flight-to-quality trade that happens regardless of whether this debt ceiling nonsense gets resolved or not. Because here’s what the amateur hour crowd doesn’t get – the dollar strengthens on crisis, even when America IS the crisis. Mind-bending? Absolutely. Profitable? You bet.

Yen and Swiss Franc: The Real Safe Haven Play

While everyone’s obsessing over USD drama, the real action might be in JPY and CHF. These currencies don’t mess around when global uncertainty spikes. USD/JPY could see some serious downside pressure if this debt ceiling theater actually materializes into something resembling real risk. We’re talking about a potential break below major support levels that have held for months.

The Swiss franc becomes particularly interesting here. EUR/CHF and USD/CHF could both see significant moves, especially if European traders decide they’ve had enough of American political incompetence for one decade. The SNB might not love a stronger franc, but they’re not going to fight the entire global market if panic selling hits USD across the board. Sometimes you ride the wave, sometimes the wave rides you.

Commodity Currencies: Risk-Off Roadkill

AUD, NZD, CAD – these are your canaries in the coal mine. When risk appetite disappears faster than free beer at a college party, commodity currencies get absolutely demolished. We’re not talking about gentle selloffs here. We’re talking about waterfall declines that make your head spin. AUD/USD could easily test recent lows and probably break them if this debt ceiling situation actually develops legs.

The beauty of trading these pairs during macro events is their predictability. They don’t overthink things. Risk off equals sell everything tied to commodities and global growth. Simple as that. CAD might have oil supporting it somewhat, but even crude gets hit when global recession fears start making headlines. And if you think the Reserve Bank of Australia is going to save AUD with hawkish rhetoric while global markets are melting down, you’re living in fantasy land.

The Real Trade: Volatility Itself

Here’s where the professionals separate from the wannabes. Instead of trying to predict which way markets break, trade the fact that they’re going to break. Period. Volatility spikes during these events are as predictable as sunrise. Straddles, strangles, or just plain old fashioned breakout trades positioned above and below key levels.

EUR/USD sitting at major support? Set your trades for the break in either direction. GBP/USD consolidating in a tight range while politicians play chicken with the global economy? Perfect setup for explosive moves once direction gets established. The specific direction matters less than being positioned for the inevitable expansion in trading ranges.

Stop trying to be nostradamus and start being a realist. Markets hate uncertainty, and American politicians have turned uncertainty into performance art. Trade accordingly. Set your stops, size your positions properly, and remember that being right about direction means nothing if your risk management is garbage. Because when this whole debt ceiling circus finally reaches its conclusion – and it will, just like every other time – markets will move fast and forgive nothing.

The house always wins, but sometimes the house burns down first. Make sure you’re betting on the fire, not fighting it.

People say to me……. ” Ya ya Kong… you with all your “macro mumbo jumbo” ( yada, yada, yada ).

Damn it Kong! Just gimme a break, and tell me how to make some money today! I want to get rich today Kong! Today!

Well…..

Short term traders need to learn a little more patience, while long-term investors need to get “a little more involved” with the day-to-day action no? The age-old sayings “you can’t have everything” or perhaps “the grass is always greener” certainly come to mind.

The entire concept / principals of “trading like a gorilla” wedges us “in between”, taking advantage of “all opportunities” regardless of what markets do cuz……(guess what??) MARKETS ARE GOING TO DO WHAT THEY ARE GOING TO DO NO MATTER WHAT!

We certainly can’t control that.

So let’s take a quick look at today…..and consider that U.S equities rallied I dunno…..like “to the moon” in a single afternoon! To the moon Kong! The moon you ass! Everything is going up ! Up! Up! Damn you Kong! I just want to get rich and go live on a beach! What the hell is going on down there? I need to get rich! Now!

He he he……Everyone needs to just calm down, take a deep breath, understand that it’s just another day and take it for what it is.

Start looking “ahead” as opposed to “dealing with the present” and things will get a lot easier.

For some it might be interesting to note – I sold out this morning well early and in advance of this “massive run up in risk assets” missing what some might imagine as “an incredible opportunity to make money” though oddly…….every single thing I track / monitor suggests that I didn’t miss a thing.

If you where fortunate enough to “pick a stock” and take advantage of this short covering rally I commend you although – we all know what really happened today.

Bulls and bears both got taken to the cleaners.

Reading Between The Lines When Markets Go Parabolic

Listen up traders – what we witnessed today wasn’t some magical bull run that changes everything. It was textbook short covering, plain and simple. When you see USD/JPY rocket 150 pips in two hours while EUR/USD barely budges, that’s not sustainable momentum – that’s panic buying from overleveraged bears getting their faces ripped off. The smart money? They were already positioned days ago, not chasing price action like amateur hour.

Here’s what really gets me fired up: everyone’s acting like this single session validates their bullish thesis on risk assets. Newsflash – one afternoon of manic buying doesn’t erase weeks of underlying weakness in global liquidity conditions. The Federal Reserve didn’t suddenly become dovish overnight, China’s property sector didn’t magically heal, and European energy costs didn’t disappear into thin air. These are the macro fundamentals that drive sustained currency moves, not some knee-jerk reaction to whatever headline crossed the wires at 2 PM EST.

The Yen Carry Trade Unwinding Reality Check

Let’s talk about what actually matters in this circus – the Japanese Yen. While everyone’s celebrating their Facebook and Tesla gains, the real story is happening in USD/JPY. We’ve been tracking this pair’s correlation with risk sentiment for months, and today’s move screams desperation, not conviction. When JPY pairs start moving in lockstep with equity indices like this, it tells me one thing: the carry trade is getting squeezed harder than a stress ball in a day trader’s sweaty palm.

The Bank of Japan’s intervention threats aren’t just noise anymore – they’re becoming reality. Smart gorilla traders know that when central banks start jawboning their currencies, you better pay attention. USD/JPY above 150 becomes a political problem, not just an economic one. That’s the kind of macro backdrop that creates real trading opportunities, not this afternoon’s sugar rush in the S&P 500.

Dollar Strength Isn’t Dead – It’s Just Taking A Breather

Here’s where most traders get it completely backwards. They see one day of USD weakness against risk currencies like AUD and NZD and suddenly think the dollar’s multi-month rally is over. Wrong. Dead wrong. The Dollar Index pulling back from extreme overbought levels is healthy consolidation, not trend reversal. When you’ve got real interest rate differentials still favoring the greenback and global growth concerns mounting, temporary pullbacks become gift-wrapped selling opportunities.

Look at EUR/USD – still trading below every major moving average that matters. The European Central Bank can talk tough all they want about fighting inflation, but their economy is staring down the barrel of recession while dealing with an energy crisis that makes 2008 look like a picnic. One day of short covering doesn’t change those fundamental realities. The gorilla approach means staying focused on these big picture drivers while everyone else gets distracted by daily noise.

Why Commodity Currencies Are Still In Trouble

Australian Dollar bulls came out swinging today, didn’t they? AUD/USD popped like champagne on New Year’s Eve, and suddenly everyone’s talking about how China’s going to save the world again. Here’s your reality check: China’s zero-COVID policy isn’t disappearing tomorrow, their property developers are still drowning in debt, and global recession fears aren’t going anywhere just because copper had a good afternoon.

The Reserve Bank of Australia can hike rates all they want, but when your biggest trading partner is dealing with rolling lockdowns and your housing market is starting to crack, those rate hikes become economic headwinds, not tailwinds. Smart money isn’t chasing AUD strength here – they’re looking for better short entries on any bounce.

The Gorilla’s Next Move

So what’s the play from here? Simple – we wait. We watch. We don’t get caught up in the emotion of single-session moves that mean absolutely nothing in the grand scheme of global macro trends. The real opportunities come when everyone else is either euphoric or panicking, and today gave us a perfect example of euphoria-driven price action that’s completely disconnected from underlying fundamentals.

Keep your eyes on the bond markets, watch central bank communications like a hawk, and remember that sustainable currency trends are built on months of fundamental shifts, not afternoon sugar rushes in equity markets. That’s how gorillas trade – with patience, conviction, and complete disregard for the daily emotional rollercoaster that destroys retail accounts.

While “penning” the previous post I looked to my girlfriend for a bit of advice.

On occasion it’s been suggested here at the blog that I try to “lighten up a bit” and perhaps try to stay “a bit more positive”. With this in mind, I feel that several months have gone by where my writing in general has been at least “moderately up beat”, and that I’ve done a “reasonable job” as to not get “too down” on any one thing in particular.

I don’t think it’s a secret for anyone reading here, that I struggle with the situation in the United States. I got involved with Forex as to my interests in “all things global” and in this case how “money” plays a role. The fact that the United States holds the world’s “current” reserve currency presents me with a bit of a conundrum as I’m not particularly interested in “American culture”.

Not to say it’s not great, only that – for me…….I would far rather “Bolivia” had reserve status as I could at least “learn something new ” here day to day.

I find the day-to-day situation in the U.S as the number one element in trading forex, that I would much rather “do without”. It’s not interesting and it’s certainly not “fun”. It can’t be ignored mind you – but it’s certainly a drag.

My girlfriend suggested that I “go easy” and of course  – respect the valued readers that take the time to show their support here at the blog and…….yes of course, I truly DO value the readership and by no means want to “get down” on the U.S.

Then it occurred to me….perhaps I should introduce readers to one of the few “other people” I actually take the time to read. I showed Laura. She changed her tune.

Ladies and gentleman I am proud to introduce the critically acclaimed Dr. Paul Roberts.

http://www.paulcraigroberts.org/pages/about-paul-craig-roberts/

If you think I might consider biting my tongue on occasion ( likely never gonna happen) I encourage you to not only read but BOOKMARK Dr. Roberts home page, as President Reagan appointed Dr. Roberts Assistant Secretary of the Treasury for Economic Policy, not to mention his time as associate editor and columnist for The Wall Street Journal.

Dr Roberts “has” the credibility to back such strong opinions.

Me I’m just a gorilla.

Why the Reserve Currency Status Actually Matters for Your Trading

Look, I get it. You might be wondering why some gorilla trader is getting worked up about reserve currencies when you just want to know whether EUR/USD is going up or down tomorrow. But here’s the thing – understanding the machinery behind the world’s monetary system isn’t some academic exercise. It’s the difference between trading with a blindfold on and actually seeing the bigger picture that moves these markets day after day.

When I mention wishing Bolivia had reserve status instead of the U.S., I’m not just being contrarian for the sake of it. The point is that having the world’s reserve currency creates a unique set of circumstances that directly impact every single forex trade you make. The dollar’s special status means that roughly 60% of global foreign exchange reserves are held in USD, and about 40% of global debt is denominated in dollars. This isn’t trivia – this is the foundation that everything else sits on.

The Exorbitant Privilege Problem

The French coined the term “exorbitant privilege” back in the 1960s, and it’s never been more relevant. Because the U.S. controls the world’s primary reserve currency, they get to print money and export their inflation to the rest of the world. Every time the Federal Reserve fires up the printing press, it’s not just American inflation they’re creating – it’s a global phenomenon that shows up in currency pairs across the board.

This is why you can’t ignore U.S. monetary policy even if you’re trading exotic pairs. When the dollar weakens due to expansionary Fed policy, it doesn’t just affect DXY. It ripples through everything from AUD/JPY to USD/ZAR. The carry trade mechanics, the commodity currency relationships, the safe-haven flows – they all trace back to this fundamental imbalance in the global monetary system.

And here’s what really gets under my skin: this system creates artificial demand for dollars that has nothing to do with the underlying economic fundamentals of the United States. Countries need dollars for international trade, central banks need dollars for their reserves, and emerging market companies need dollars to service their debt. This constant dollar demand props up the currency in ways that can completely distort normal market relationships.

Reading Between the Lines of Central Bank Actions

When Dr. Roberts writes about the economic distortions created by current policy, he’s highlighting something that should be front and center in your trading analysis. Central banks around the world are trapped in a system where they have to react to Fed policy whether it makes sense for their domestic economies or not. This creates predictable patterns that smart traders can exploit.

Take the Swiss National Bank’s infamous EUR/CHF peg that blew up in 2015. That wasn’t just a random policy failure – it was the inevitable result of trying to maintain an artificial currency relationship in a world where the underlying monetary foundations are constantly shifting. The SNB was essentially trying to fight the global dollar system, and physics won.

The same dynamic plays out in different ways across emerging markets. When the Fed tightens, capital flows back to the U.S., emerging market currencies get crushed, and their central banks are forced into defensive positions regardless of what their domestic economies actually need. It’s not organic price discovery – it’s a rigged game where the house always has an edge.

The Bolivia Principle

My Bolivia comment wasn’t just a throwaway line. Imagine if global trade was denominated in Bolivian bolivianos instead of dollars. First, you’d have to learn about Bolivian politics, economic policy, and social dynamics. More importantly, the global monetary system would be anchored to a much smaller, less complex economy where cause and effect relationships would be clearer and more predictable.

Instead, we’re stuck analyzing the policy decisions of a massive, financialized economy where the connection between monetary policy and real economic outcomes has been severed by decades of intervention. The U.S. can run massive deficits, print unlimited money, and maintain artificially low interest rates precisely because of this reserve currency status. It creates a feedback loop that makes fundamental analysis increasingly difficult.

This is why reading someone like Dr. Roberts matters for traders. He’s not afraid to call out the distortions and contradictions that make our job harder. When you understand that the game is rigged at a structural level, you can start to anticipate how those distortions will play out in currency markets.

It absolutely pains me to no end,  but (as the planet’s financial blog space  is currently “a fire with debate”) I guess I should at least “weigh in” on the debt ceiling issue – and the consideration of a U.S default.

This most certainly IS NOT GOING TO HAPPEN!

These bozos have sunk “gazillions of dollars” into this “pseudo recovery” driving their currency into the ground. They’ve attempted to start wars , cleaned out retirement savings accounts and spent more time in bed with the “boys on wall street” than the average Ukrainian hooker living in NY.

There is not a single chance in hell they would jeopardize “what’s already hanging by a thread” over some little “tug of war” over a couple more 1’s and 0’s. Impossible.

Of all things they can ( and will ) continue to screw up – any “further knock to the credibility of the U.S” and it’s currency / ability to pay its bills IS NOT ONE OF THEM.

You see – as sad a state of affairs it is in the U.S ( domestically speaking ) the “global situation” has deteriorated far worse. The bond auction hall is empty (short of Ben and his “magic suit case”) and countries “planet wide” have been diversifying “out” of US Dollar reserves on a scale not seen before in the history of man.

The “Petro Dollar” at risk , the East growing stronger by the day…….now’s not the time for something so “meaningless” to make any larger a fool of the U.S.

Wasn’t Syria enough?

The entire planet stands to benefit from the continuation of the “American Ponzi Scheme” , so be assured –  those so close to the action won’t be letting it slide any time soon.

The Real Market Implications While Politicians Play Theater

Dollar Index Technicals Don’t Lie When Washington Does

While these congressional clowns wave their hands around pretending this debt ceiling drama matters, the DXY tells the real story. We’re sitting at critical support levels around 101-102, and every single time this political theater resurfaces, smart money floods INTO dollar positions, not out of them. Why? Because institutional traders know exactly what I just told you – this is pure kabuki theater. The real action is watching how EUR/USD reacts to each headline. Every spike down toward 1.0800 on “default fears” is nothing more than a gift-wrapped entry point for dollar bulls who understand that Europe’s banking crisis makes the U.S. look like a financial fortress by comparison.

The carry trade dynamics here are absolutely beautiful if you know what you’re looking for. Japanese pension funds and European insurance companies aren’t suddenly going to dump their Treasury holdings because some freshman congressman from Iowa wants his fifteen minutes of fame. They’re mathematically trapped in dollar-denominated assets, and the Fed knows it. Watch the 10-year yield action during these “crisis” moments – it barely budges because the big boys are buying every single dip.

Central Bank Currency Swaps Reveal the Puppet Strings

Here’s what the financial media won’t tell you about this whole charade – the Federal Reserve has currency swap lines with every major central bank on the planet. The ECB, Bank of Japan, Bank of England, Swiss National Bank, and Bank of Canada all have unlimited access to dollars when push comes to shove. You think these institutions are going to let some political posturing destroy the very system that keeps their own currencies from complete collapse?

The real game is in the cross-currency basis swaps. When genuine dollar shortage hits global markets, the premium for borrowing dollars explodes. During actual crisis periods, we see EUR/USD basis swaps blow out to -50, -60 basis points. Right now? They’re sitting pretty around -10 to -15. The market is practically yawning at this debt ceiling nonsense because sophisticated players know the Fed’s liquidity backstops make any real default scenario impossible.

Emerging Market Currencies Show Where Smart Money Really Stands

Want to see the canary in the coal mine? Watch the emerging market currency complex. Turkish lira, Argentine peso, Pakistani rupee – these currencies get absolutely demolished when there’s even a whiff of genuine dollar strength or global financial instability. During real dollar shortage periods, USD/TRY can spike 5-10% in a matter of hours. But during these manufactured debt ceiling crises? These pairs barely move because emerging market central banks know the game too.

The Chinese yuan positioning is even more telling. If Beijing actually believed there was any real default risk, they’d be dumping Treasuries faster than Hunter Biden burns through crack pipes. Instead, the PBOC keeps their dollar peg management steady as a rock. They’re not hedging for chaos because they know this is all smoke and mirrors. When the world’s largest Treasury holder isn’t even flinching, that tells you everything you need to know about how “serious” this threat really is.

The Positioning Play Every Trader Should Recognize

This creates an absolutely gorgeous setup for anyone with half a brain and the stones to play it correctly. Every single debt ceiling crisis follows the same pattern: initial dollar weakness on headlines, followed by aggressive buying as reality sets in. The algos and headline-reading retail traders panic sell dollars, while institutional flow comes in the opposite direction.

USD/JPY is particularly beautiful here because the Bank of Japan is even more committed to money printing than our own Fed clowns. Any dip below 132 on “default fears” is free money for patient traders. The Japanese can’t let their currency strengthen without destroying what’s left of their export economy, and they know the dollar isn’t going anywhere.

Same story with GBP/USD. The Bank of England is dealing with inflation that makes Jerome Powell’s problems look like a mild headache. Sterling strength is the last thing they can afford right now, so any cable rally above 1.2500 on dollar weakness gets sold immediately by both retail Brexit bagholders and institutional UK pension funds trying to match their liabilities.