Currency Market Volatility
Currency market volatility gave quite a shock this week. The huge expansion in volatility across the currency market caught many hedge funds and larger operators flat-footed. Many were positioned in the currency market or had trades closely tied to it and had to scramble to get out of positions due to the substantial increase in volatility this week according to the Wall Street Journal.
Could we have seen the currency market about to become highly volatile before it happened? Well, I don’t know about that, but we could see that a pullback of some degree was likely. I discuss the currency market volatility in this week’s video blog, and why the downdraft was so large (hint: it has to do with the hedge funds). I also walk through a Wyckoff analysis of the US Dollar futures (DX) and give a trading few ideas regarding currency market volatility.