Safe-Havens Spike Ahead Of The Weekend

Posted Friday, August 2, 2019 by
Shain Vernier • 1 min read

Safe-havens are back in style, as traders search for a port in the Trump Twitter-fueled storm. Since Thursday afternoon’s 10% China tariff announcement by U.S. President Trump, safe-havens have quickly become go-to assets. Gold, the Swiss franc, and Japanese yen have all gained ground amid heavy bidding.

One of the biggest movers among all safe-havens has been the Swissy. Featuring a bearish plunge of more than 70 pips, the USD/CHF has crashed through daily support levels and doomed one of my trade recommendations from Thursday. It just goes to show that no matter how solid a trade may look to be, a surprise event can destroy its shot at hitting the take profit.

Safe-Havens Bang Higher As Weekend Bell Nears

With only a few hours left in the trading day, traders appear ready to go home decisively risk-off. U.S. indices are firmly in the red, with GOLD and the Swiss franc on the rise.

USD/CHF, Daily Chart safe-havens
USD/CHF, Daily Chart

For the USD/CHF, there is one level worth watching very closely for the rest of today and into next week: 

  • Support(1): 62% Fibonacci Retracement, .9792

Overview: Since Wednesday’s FOMC interest rate cut, it has been all downhill for the USD/CHF. A prevailing “one-off” sentiment toward rate cuts coupled with fresh trade war strife haven’t done the U.S. markets any favors. Subsequently, the Swiss franc has put on a show vs the Greenback.

Going into next week, it will be important to remember that institutional capital has bought dips in U.S. stocks all year long. If we see this strategy dominate Wall Street on Monday ― and it very well may ― safe-havens are likely to once again take a backseat to equities.

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