Political Tensions Arise – Are Safe Haven Currencies Taking Off Soon?
Skerdian Meta • 2 min read
Political tensions between North Korea and the US have always been here, but recently they have escalated.
A couple of days ago the lunatics in North Korea tested another missile which could potentially reach Alaska, although we all know Korean missiles can never reach US land even if they work properly, because you know, North Korean technology, go figure.
Some people are worried they might attack South Korea, though I don´t think the North would last 24 hours.
But lunatics are what they are and you can never rule anything out. After all, it would be enough to raise the alarm and send the financial markets crazy for some time, until everyone realizes that North Korea is just a little fly on the wall.
By the way, Donald Trump is planning a speech in Poland regarding this issue.
If anything was to happen, safe haven currencies would absolutely fly, big time. Swissy and the Yen would be the primary beneficiaries of this surge, but the problem here would be to get into the trade.
Suppose it all kicks off today; USD/JPY would dive several cents, if not more. Would you sell this forex pair tonight?
It will likely all be over by tomorrow, and a violent reversal might follow. I don´t rule out going short USD/JPY or USD/CHF, but the safest bet in my opinion is selling EUR/CHF.
EUR/CHF is overbought in most timeframe charts and we´re just below the big 1.10 resistance level. So, going sort EUR/CHF would make more sense.
Reversing the safe haven trade would be a good idea as well since I´ve heard a few thing about this situation, but I will explain it in another post soon.
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