What Was All That Fuss About?
Good morning guys, I´m feeling a bit dizzy today from all that relentless USD selling that took place yesterday. Did you see that? It was strange because it started as a normal retracement, but then it evolved into total panic. But then again, that´s how this sort of moves happen, they start slowly in the first few hours, but then the snowball starts rolling and it turns into an avalanche.
It was plain panic because the forex traders were running for the hills, searching for safety. The safe haven currencies such as the Yen, the CHF and not-so-surprisingly the Euro enjoyed good demand. I said not so surprisingly because the ECB (European Central Bank) interest rates are negative, the same as the other two related central banks, so they can´t lower them much more.
USD/JPY lost about 130 pips while USD/CHF declined 170 pips. EUR/CHF was also a major loser and it even broke below the 1.08 support level, but no action from the SNB (Swiss National Bank). I guess they were afraid to act without the president Jordan, since he was in a conference/meeting. He repeated that the CHF is overvalued but the market didn´t give a damn. It´s hard to turn the market sentiment around when panic sets in.
This has been one hell of a decline
But, what was the reason for all that?
Well, apparently the first lady Michelle Obama deleted all her comments about Hillary Clinton. It seems like she wants nothing to do with Hillary, since all her traces in Michelle´s twitter account have been erased. But that´s not confirmed yet.
Perhaps another reason was the fact that Donald Trump moved ahead of Clinton in a poll from the ABC network. The re-opening of Hillary´s email case from the FBI adds to this negative sentiment as well. Or maybe it´s only the market, it´s not very rarely that we see the forex market feed on its fears. Whatever the reason, it is hard to trade in such market conditions, because it is extremely difficult to anticipate such moves.
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