Forex Daily Technical Report Another Wave of Carry Trade Unwinding ...
The Japanese yen and Swiss Franc surges across the board again as the week starts on another wave of carry trade unwinding. Asian stock markets tumbled, extending the global sell off what wiped $1.5T value of global equities. The Morgan Stanley Capital International Asia-Pacific Index fell 2.9% to 138.68, the lowest close since Jan. 11. The Emerging Markets Index fell 2.4% to 856.96, adding to a 4-day, 6.7% slump. The crash in emerging markets as triggered further covering of yen and franc short positions which were used to fund investments in high yield assets.
Technically speaking, note that today's extension in USD/JPY weakness has pushed it through the important medium term rising channel, confirming that the year long up trend from 108.99 has completed at 122.17 and further medium term weakness is to be seen.
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