This is important, because Yen buyers were convinced that now was indeed the time to get out of risk and sell the US$/Yen too. This means to unwind the carry trade and buy US Treasuries.
I am surprised that equities are not weaker, which indicates resilience.
However, both the NQ8_MF and the NQ100_MF continued to show a negative divergence to price, and a price bounce attracted fewer buyers.
But there were positive signs in the Futures in the form of positive LEV/Price divergences.
Conclusions:
Exchange rates are key, because they influence the general flow of money between countries. This flow of money is however mostly influenced by rate differentials, which still favor US assets.
Hence, I do not believe that the recent US$ weakness will stay that way for long.
Based on the Futures positive divergences, I think that the market is setting itself up for a short squeeze that will take place Thursday and Friday.
