Safe-Havens Rally Ahead Of Weekend Break

Posted Friday, July 17, 2020 by
Shain Vernier • 1 min read

Once again it’s Friday and the markets are indecisive going into the weekend break. At the halfway point of the U.S. session, the DJIA DOW (-18), S&P 500 SPX (+7), and NASDAQ (+20) are trading near flat. The story of the day has been lagging consumer sentiment and strength in safe-haven assets.

During today’s session, several key metrics were released to the public. If you missed it, my colleague Skerdian covered the UM Consumer Sentiment Index (July) release in depth. Be sure to check his post out here.

In addition to the UM Sentiment Index, several American real estate metrics were put out to the public. Here’s a quick look at the highlights:

Event                                                             Actual            Projected          Previous

Building Permits (MoM, June)                    1.241M           1.290M             1.216M

Housing Starts (MoM, June)                       1.186M            1.169M             1.011M

Housing Starts Change (June)                     17.3%                  NA                   8.2%

Right now, the game is on for U.S. developers. Permits are up and Housing Starts have grown by 25% for May through June. It certainly looks like builders, lenders, and homebuyers are enjoying that cheap COVID-19 emergency FED funding.

Let’s take a look at where the USD/CHF stands going into the weekend.

Safe-Havens Rally Ahead Of The Weekend

As of this writing, gold, the Swiss franc, and Japanese yen are gaining ground on the USD. For the USD/CHF, the bearish price action is approaching a key support level.

USD/CHF, Weekly Chart

For the Swissy, there’s one level currently on my radar ahead of the weekend:

  • Support(1): 78% Retracement, 0.9341

Bottom Line: Until elected, I’ll have buy orders in the USD/CHF queued up from 0.9351. With an initial stop loss at 0.9321, this trade yields 30 pips on a standard 1:1 risk vs reward ratio.

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