Safe-havens are in vogue today as trade war fallout is dominating market sentiment. Significant intraday gains in the Japanese yen, Swiss franc, and GOLD have come pass as investors are actively limiting risk. It appears as though a majority of traders are interested in hedging their bets ahead of the weekend break.
Today’s lead story of the Trump administration’s bold tariff move against Mexico is the classic definition of systemic risk. The new tariff proposal came on quickly and has shaken asset values across the board. For now, cutting risk exposure is the preferred course of action until the U.S./Mexico situation becomes clear.
Safe-Havens Are On Parade
Until today, the Greenback was putting together a nice week against the Swiss franc. Now, sellers are in control and rates have returned to a key level of Fibonacci support.
Bottom Line: For the USD/CHF, the macro-wave 62% Fibonacci Retracement (1.0025) is a huge level. Should it be taken out, a return to par value is likely during the late session. In the event rates continue to fall, I will be scalping 1.0006 to the long. With an initial stop at .9998, this trade produces a fast five pips on a bounce from 1.0005.
Today’s close is going to be a big one for the U.S. markets. Commodities, equities, and the Greenback are all on the slide. If this trend intensifies as we near the closing bell, next Monday’s June 3rd open may bring more of the same.