The Korean won has traded lower twice, in 1997 and 2008. Both moves were explosive. The question for traders is termination or follow through? If it follows through, there’s all manner of short targets because this is not an isolated chart. It has to be seen in concert with charts such as USDJPY, EURUSD, USDCNY and so on. It has to be seen in context with stock charts such as EEM that are at long-term support.

A currency crisis can have several catalysts. A big one would be yuan depreciation. A breakdown in U.S. stocks that triggered more dollar strength might do it. It’s an echo of the 1997 Asian Crisis more than the 2008 financial crisis.

Editor’s note: the silly post title isn’t LZ’s fault. It’s Tim’s.

Few are looking for this one, but if the yen breaks lower, then I think we’re weeks at most away from a major depreciation in the Chinese yuan. Remember the market plunge of August 2015? Similar conditions are in place with reversal in commodities, Fed tightening (escalation from 2015 when Fed had flat balance sheet and no rate hikes), U.S. dollar rally and disastrous economic policy in China.