Safe-Havens Bang Higher As Angst Grows - Forex News by FX Leaders

Safe-Havens Bang Higher As Angst Grows

Posted Monday, August 5, 2019 by
Shain Vernier • 1 min read

Anytime futures brokers send their clients emails talking about “circuit breakers,” the markets are heading south fast. A few minutes ago, I received several such emails, outlining the 7%, 13%, and 20% price limits for CME U.S. equity index futures products. This is never a good sign for those long equities and is usually great news for the safe-havens.

As we approach the mid-U.S. session, the losses on Wall Street are mounting. The DJIA is off almost 600 points. Conversely, gold is north of $1475 and the USD/CHF has fallen beneath .9750. At this point, investors are taking risk off of the table in mass, while safe-havens are on the bull.

Safe-Havens Rally As U.S. Equities Fall Apart

June’s lows are rapidly coming into view for the USD/CHF. Rates have crashed through all support levels and appear destined for a return to .9700.

USD/CHF, Daily Chart
USD/CHF, Daily Chart

Here is the level to watch in the USD/CHF has traders flee to the safe-havens:

  • Support(1): June Low, .9693

Bottom Line: Today’s action is decisively bearish, as is the price action in the USD/CHF. However, a tight countertrend play from just above June’s low should be good for a few pips.

Until elected, I will have buy orders in queue from .9699. With an initial stop at .9684, this trade produces 15 pips on a standard 1:1 risk vs reward management plan.

Once again, this is a countertrend play, making it a higher-risk trade. If you are going long the USD/CHF, be sure to keep you leverage moderate as the safe-havens continue to show strength.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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