Chinese economic data and significant uncertainty in the markets caused a massive, overnight flash-crash. The yen was the safe harbor of choice and in a matter of 15 minutes many yen pairs tumbled nearly 600 pips. Throughout the night and into the end of the U.S. trading day, most currency pairs recovered the majority of the difference seen in this dramatic move, returning to very close to an average close. Though a sell-off and recovery from a flash crash is not an indication of another crash, often half the distance of the range of the candle can be used as a target. We will be watching for more volatility and a mid-range target.
