UDJPY fails to bounce off 80.00
Even on the lighter volume of the U.S. afternoon session USDJPY failed to bounce off the historic 80.00 level, which likely points to still lower prices to come. Given the size of the rally in the Japanese currency over the past several years it isn’t hard to imagine the move culminating with a rather large peak.
While experienced traders such as George Soros have identified the gold market as the bubble of our time, I have not seen anyone pointing out the Yen’s potential to drive out the very last shorts before capitulating.
If in fact the current global recovery does continue to gain traction, and markets start to see more independent movement post-quantitative easing, we could start to see a normalization of economic trends. Knowing how markets move though it would seem unlikely that a return to “normalization” could occur without the current slate of bubbles bursting, which would give the appearance and odor of being anything but normal. One thing I learned as a runner on the floor of the Chicago Board of Trade over 30 years ago, is the world does turn, and so do markets, but it is rarely on a schedule likened by the majority.
Someone asked me the other day where I would put my money today? I answered, “A bank”.
I imagine a lot of people who thought they knew what they were doing when it came to their money over the past few years are going to wish they kept it in the bank.
Jay Norris is Chief Market Strategist at Clovernest Financial Group, and the author of Mastering the Currency Market, McGraw-Hill, 2009.
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