Safe-Havens Open Week In The Red
Shain Vernier • 1 min read
The week is off and running on Wall Street, with stocks hovering slightly in the green. At the midpoint of the U.S. session, the DJIA DOW (+54), S&P 500 SPX (+17), and NASDAQ (+71) are trading to the positive. Safe havens are on the retreat, led by an intraday downtrend in gold and the Swiss franc. For the time being, investors aren’t too worried about assuming fresh risk as the week gets underway.
Today’s U.S. economic calendar is wide-open and features very few events worthy of note. However, U.S. Treasuries did extend their bearish yield trend as investors continue to pile into bonds. Here is a quick look at this morning’s action in the debt market:
Event Actual Previous
3-Month T-Bill Auction 1.63% 1.64%
6-Month T-Bill Auction 1.60% 1.62%
For the safe haven currencies, both the USD/CHF and USD/JPY are up moderately. Let’s dig into the technicals for the USD/CHF and see if this market is poised to continue its recent bear run.
Safe Havens Showing Signs Of Weakness
The past three sessions have brought major bearish action to the USD/CHF. Rates are off more than 125 pips and are in a position to extend losses. Unless we see significant bids begin to hit the market from the Daily Double Bottom (.9838-43), the downtrend will likely continue.
Overview: For the moment, the Daily Double Bottom (.9838-43) is hanging tough as downside support. However, aside from Brexit, there is a lack of fundamental market drivers facing this pair until Thursday. So, at least for a few more sessions, safe havens and the USD/CHF may continue to trade with modest participation.