Question Is the dollar dropping because of the Japan bond auction?

[Michael Vance 61]

Hey everyone, still trying to wrap my head around how these news pieces actually move the charts. I saw that the dollar took a bit of a hit today because of some record Japanese bond auction, and at the same time, the pound seems to be absolutely ripping because of those jobs numbers. Ngl, I'm finding it hard to connect the dots on how one auction in Japan has such a big ripple effect on my USD pairs.

I’m currently holding a few positions and got a little nervous seeing the red candles earlier. Are you guys treating this as a temporary dip or is the dollar actually looking weak for the rest of the week? I’m still pretty new to the whole macro side of things and don't want to get caught in a fomo trap if this is just a quick scalp opportunity. Does anyone have any tips on what I should be looking at when these bond auctions happen? Any insight would be a huge help.

 

[LeoSterling]

The carry trade unwind is real. JPY strength is nuking everything right now, my longs got absolutely rekt when that auction data hit. Macro is a nightmare.

 

[JulianCraft]

The carry trade unwind is real. JPY strength is nuking everything right now

Yep, and this is just the preview @LeoSterling. Decades of free Japanese liquidity getting pulled back home is going to rip the bandaid clean off all these overleveraged dollar assets.

The worst part is equity bulls still think this forces the Fed into emergency cuts to save them. A weaker dollar just reignites imported inflation while yields refuse to drop. We're nowhere near done with this cycle.