Let’s say you are a hunter confronted with a charging rhinoceros. You take careful aim, squeeze the trigger of your suitably heavy gun, and hit the rhino square in the forehead. He keeps coming.

Who has the problem now?

Currency traders face a similar if less dramatic dilemma on occasion. The fundamentals, or in this discussion the quantitative indicators, behind a given market may look to favor a given currency, but the market starts moving in the other direction.

Such was the case for the U.S. dollar (USD) vis-à-vis both the euro (EUR) and the Japanese yen (JPY) by the late spring of 2006. Both currencies were strengthening against the USD and for non parallel reasons based on the three separate quantitative indicators hereafter.