Hello All !

With an active and volatile start to the week, Risk Aversion is the Name of the Game…as mentioned in the previous Posts.

The Dollar and the Yen staged solid and weight-filled strength yesterday literally leaving no Currency Unit untouched!

Our Macro correlations are largely back in view, as Equities and the Indices Outflows sailed right along with these two Units.

One of the early Lessons of Foreign Exchange work is to “see” the Pair as two separate Entities.

In this fashion we can “match” up which “Side” (economy) of the Pair may be stronger, weaker, and to what degree or extent.

(This is still a deeply valid Principle that I use on many different levels, and I thank my Primary mentor, Ed Ponsi, with this essential and beautifully simple Concept.)

When we think of these ideas, we ask some basic questions:

“Which Currency is stronger and why?”…”Which is weaker and why?”…”To what extent is the disconnect?”…and so on.

Let’s deal with the Dollar and Yen for a few days through many of our liquid and popular Pairs, beginning with Euro Yen and Aussie Dollar.

A “World Tour” may shed some light on this query for us!

“CVJ…why do this? The “obvious”  Pair to answer this question is Dollar Yen!” …I can hear the CVJ Guys say…

(Hmmm…I’m beginning to think these guys are not really my friends since they always contradict me!…)

“True!…but the real measure here is how the Dollar and the Yen behave on their own accord within OTHER Pairs…not just themselves!”,  I say… hopefully putting these guys in their place for a while.

First of all, let’s jump out to the Daily Views of these two and see how similar they are behaving…

(Post-Time is 3:10 GMT)

(click once for the captures)

Yen looks confidently strong in this round!…

Let’s check on the Dollar and its’ match with the Aussie!

Dollar rather stout here, too…although our Macro-Bear Flag is a little “loose and noisy”.

Hmmm…so who “wins” the “Strongest Unit Competition” with these two examples?

Feel free to participate here with your thoughts and commentary!

I promise…the CVJ Guys will leave you alone!