SB Trade Desk: Extreme FX Low Volatility Warning!

The following charts objectify the trendless state and low volatility in FX markets and convey the extreme nature of the situation.  I talked about these charts towards the end of today’s webinar.  Think about these charts as indicating extreme range contraction.  Extreme range contraction gives way to trends and eventually extreme range expansion (trends).

@JamieSaettele

@SBTradeDesk

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USDCHF Weekly

USDCHF weekly RSI has been between 70 and 30 for 228 weeks.  The previous record was 160!

USDJPY Weekly

USDJPY weekly RSI has been between 70 and 30 for 126 weeks.  The previous record was 115 in Feb 2008.  A prolonged downtrend emerged thereafter.

DXY Daily

DXY daily RSI has been between 70 and 30 for 200 days.  The previous record was 202 in July 2014.  Kind Dollar went on a rampage thereafter.

EURUSD Daily

EURUSD daily RSI has been between 70 and 30 for 198 days.  The previous record was 224 in April 2006 (not shown).  The breakout in April was the beginning of the run to 1.6000 in roughly a 2 year period.

AUDUSD Daily

AUDUSD daily RSI crossed below 30 on 5/16 after spending 264 days between 70 and 30.  The previous record was 244 in May 2014, which was the beginning of a major downtrend.

DXY Weekly

The 50 week range (using closing prices…as of last week’s close) is 4.57%.  The 50 week range was this small from June-Aug 2014, Jan 1997, and from 1976-1977 (not shown).   Strong trends emerged in all instances.

EURUSD Weekly

The 50 week range (using closing prices…as of last week’s close) is 5.6%.  The 50 week range was this small from June-Aug 2014.  EURUSD went into its strongest downtrend ever thereafter.

USDCHF Weekly

The 50 week range (using closing prices…as of last week’s close) has turned up from 4.95%.  The 50 week range was this small in 1972 and 1977 (not shown).  USDCHF plunged for years after the small range readings.

USDJPY Weekly

The 50 week range (using closing prices…as of last week’s close) is 4.81.  That’s the smallest ever.  The 50 week range was this small in 1976.  USDJPY plunged for years thereafter.  Even the low vol readings in 2007 (before the financial crisis) don’t compare!  The lowest the 50 week range got in 2007 was 6.32%.