Volatility has cooled for nearly every asset class; but caution is still present. This is well founded since price action has maintained its dramatic swings, it just so happens that the momentum isn't consistently in one direction.

Looking to the currency market, volatiltiy on the various majors has pulled well off recent record highs, yet they remain relatively high on a historical basis. One week implied voltility of USD/JPY has pulled back from its high at 65 perecnt to 38.7 percent - though for perspective, the average over the past year was a mere 14.5 percent. Similarly, USD/CHF pulled back from 28 percent is now hovering nearly 4.5 percentage points lower.

Alternatively, both the EUR/USD and GBP/USD volatility gauges are just now pushing new highs. For the euro-denominated major, implied volatility suggests the pair could move 33.7 percent on an annualized basis over the coming week. And, while the pound is off of the 35 percent high from last week; at 30 percent, their isn't much relief from dramatic price action in this overwhelmingly active pair.

John Kicklighter a Currency Strategist at FXCM.