AUD/USD, AUD/JPY flows: Stretched risk due a pullback?
Tech stocks showing some signs of running out of near-term gas
Overstretched vs short-term supporting trend, so could be due a technical correction
Something to watch if it spills into metals, volatility
Looking at how short-term stretched the tech markets have got, even without any bigger picture drivers the risk of more of a pullback over the next week or two does look reasonably high.
The Nasdaq for instance moved to mid double digit percent over-run compared to its basic short-term 50dma trend. On average, on a closing basis, the market has seen 3-5% pullbacks over the next 20 days when the stretch has been as higher or higher, with a max closing correction over that period of 17%~ and a maximum closing extension of 2.5%. Once momentum turns, it is quite common for a full retracement at least to the moving average. In that scenario, with the future currently off around -1% again so far today, there would be at least a further 7% to go.
Relevance to FX is that this has tended to be shielding risk through all the Iran gyrations. So if we did see more of a proper, albeit corrective, pullback kick in with any speed over the next week or so, then that would be a consideration for the likes of AUD/JPY, especially if it spilt into associated metals and volatility.