"Looking at the action on Wall Street in the last 3 days, it's hard to avoid the suspicion that computer traders and 300 pound Gorillas (aka hedge funds - no capitalisation as reputations much diminished these days!) are pushing the volatility around within the current range limits so as to scalp extra dimes while making all long-only investors super-nervous. I note this action is mirrored exactly in the USD/AUD cross, a typical risk proxy since 2008."

David Fuller's view You may be right although I have seen less evidence of high-frequency trading (HFT) on Wall Street and in other large market centres over the last six months. Has unfavourable publicity and tighter regulation driven HFT firms elsewhere, perhaps to forex and commodity markets? I am not sure but many in the Collective of Subscribers will know considerably more about this than I do.

What I do know and have commented on for decades is that we usually see some churning action as the big, actively traded indices lose upside consistency. It is a sign of disagreement and also a transformation from demand domination to supply domination for at least the short term. You will note similar action during the September to October 2012 temporary rollover. You can also see some clear dynamics at the reaction lows, as short selling and also some capitulation selling quickly gives way to short covering and renewed demand.

Re USD/AUD, as you mention since 2008, I have shown it on a weekly chart. It has been choppy within part of the current range but note the Type-3 churning, time and size top formation within 4Q 2008 and 1Q 2009. For those of us who look at it on an AUD/USD basis (weekly & daily), it has certainly been choppy, whether due to HFT, the Reserve Bank of Australia trying to cap the rallies near A$1.06 or just the actions of everyone else who is interested in this cross rate and is playing the range while it persists.