As we highlighted in our weekend piece, the dollar/yen cross is becoming quite overbought…and the sentiment on the yen has become very bearish. Therefore, the odds of a reversal here are quite high…and this could/should have a negative impact on the “yen carry trade.”
We’d also note that the dollar is getting overbought against other currencies, so the DXY dollar index is also getting ripe for a pullback. If that happens, it could/should have a compelling impact on other asset classes as well.
