It was a classic case of whale-on-whale violence.
George Soros made at least $1.2 billion shorting the Japanese Yen since last year, undoubtedly taking down a few whales on the other side of the trade.
For our purposes, though, recall that the Japanese Yen tends to trade inversely to global risk appetite, as the “Yen Carry Trade” often enables risk and leverage to flourish. In addition, on February 1st of this year I published a blog post titled, “Careful Being a Superhero with the Japanese Yen,” where we observed a steep downtrend that was riding along its lower weekly Bollinger Band, capable of heading lower yet.
Such a Bollinger Band technical phenomenon is actually a sign of abnormal weakness–or a strong downtrend if you prefer it phrased that way–to the point where picking the bottom in the Yen was setting up to be a sucker’s bet looking out several weeks or months.
Updating that chart, below, on the same FXY ETF we can see that the Yen is no longer riding its lower weekly Bollinger Band. Instead, it may be trying to stabilize down here and could easily be forming a weekly chart “hammer” bottoming candlestick.
You might still not want to be a superhero with the Yen here. But the action as we conclude March is quite different than what we saw earlier this year…
_____________________________________
