News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • 🇦🇺 Westpac Leading Index MoM (SEP) Actual: -0.02% Previous: -0.27%
  • Hold your breath. Bitcoin is a sneeze away from tagging an intraday record high. $BTCUSD
  • 🇯🇵 Balance of Trade (SEP) Actual: ¥-622.8B Expected: ¥-519.2B Previous: ¥-637.2B
  • Heads Up:🇦🇺 Westpac Leading Index MoM (SEP) due at 00:00 GMT (15min) Previous: -0.3%
  • Heads Up:🇯🇵 Balance of Trade (SEP) due at 23:50 GMT (15min) Expected: ¥-519.2B Previous: ¥-635.4B
  • RT @Peter__Wood: @JKempEnergy Lots of copper demand on the horizon. Source
  • The New Zealand Dollar made new highs against the Japanese Yen but remained in a range trading environment against the Swiss Franc. Will NZD/CHF make new highs? Find out here:
  • Gold prices are under pressure after China growth slowed and New Zealand inflation surged, with investors pricing in more aggressive central bank policy outlooks, which is supporting bond yields.Get your market update from @FxWestwater here:
  • Energy has been on a tear, with crude oil having recently broke above a major long-term threshold. Right around 77 was big resistance from a decade ago. Get your market update from @PaulRobinsonFX here:
  • RT @BrendanFaganFx: Nasdaq 100 Outlook: Tech Stocks Continue Higher as Netflix Posts Strong Q3 Results $QQQ $NFLX $NDX $NQ_F Link: https:…
Safe Haven Currencies Gain Further as Aussie and Euro Lead Way Lower

Safe Haven Currencies Gain Further as Aussie and Euro Lead Way Lower

Christopher Vecchio, CFA, Senior Strategist

Risk-aversion is afoot this morning with the three major safe havens – the Japanese Yen, the Swiss Franc, and the US Dollar – leading the way higher against high beta and risk-correlated currencies – the Australian Dollar and the Euro. This is not something we see that often anymore: since the September 6, 2011 EURCHF floor implemented by the Swiss National Bank, the Euro and the Swiss Franc have held a +0.94 daily correlation (i.e. if EURUSD appreciates then USDCHF depreciates).

As we’ve been stressing since the European Central Bank’s decision to unveil an unlimited sterilized bond-buying program on September 6, 2012 (ironic that two major Euro-zone milestones took place exactly one-year apart, but that’s neither here nor there), the conditions that come along with the debt monetization scheme are unpalatable for Italy and Spain. Soon after the ECB’s plan was unveiled, Italian Prime Minister Mario Draghi said "Italy would not accept conditions beyond those already agreed and which we are already respecting,” which leads us to believe that the ECB will not be supporting Italy. Good luck.

The Spanish situation is slightly different. After taking a €100 billion bailout for its heavily indebted banking sector – plagued by a housing crisis, not so different than the US housing crisis circa 2007 – it’s looking increasingly likely that Spain will need a sovereign bailout. Why? The situation is analogous to what happened with Ireland: the country nationalized its banks and took their bad loans on, and eventually, it was shut out of the funding markets. If Spain is to stay solvent, it cannot allow its banking crisis to proliferate; and the only way that happens is if Spain receives another capital injection. Lower bond yields will help, but this of course – as explicitly outlined by ECB President Mario Draghi – will only come with “the condition.” With no bailout in the works, yields are back up, and this game of back and forth will continue until market participants implicitly force Spain to take a bailout.

Taking a look at credit, peripheral European bond yields are back up, underpinning Euro weakness thus far today. The Italian 2-year note yield has increased to 2.304% (+3.4-bps) while the Spanish 2-year note yield has increased to 3.227% (+3.1-bps). Conversely, the Italian 10-year note yield has decreased to 5.068% (-1.5-bps) while the Spanish 10-year note yield has decreased to 5.877% (-3.8-bps); higher yields imply lower prices.


JPY: +0.11%






AUD: -0.53%

Dow Jones FXCM Dollar Index (Ticker: USDOLLAR): +0.19% (-0.38% past 5-days)


Safe_Haven_Currencies_Gain_Further_as_Aussie_and_Euro_Lead_Way_Lower_body_Picture_3.png, Safe Haven Currencies Gain Further as Aussie and Euro Lead Way Lower

The docket is a bit more saturated today, with three releases due out that could impact volatility and intraday trends. At 08:30 EDT / 12:30 GMT, the USD Current Account Balance (2Q) will be released, and the narrowing deficit suggests this could be supportive of the US Dollar. At 09:00 EDT / 13:00 GMT, the USD Net Long-term TIC Flows (JUL) report is due, which details demand for USD-denominated assets like Treasuries. At 10:00 EDT / 14:00 GMT, the USD NAHB Housing Market Index (SEP) will be released, and is expected to show a slight uptick.


Safe_Haven_Currencies_Gain_Further_as_Aussie_and_Euro_Lead_Way_Lower_body_Picture_6.png, Safe Haven Currencies Gain Further as Aussie and Euro Lead Way Lower

EURUSD: The EURUSD has pulled back from its 76.4% Fibonacci retracement on the February 2012 high to the July 2012 low at 1.3145, closing below the key ratio for the second consecutive day on Monday. With the daily RSI very overbought, it appears a correction may be underway. Near-term resistance lies at 1.3145, 1.3165/70, 1.3240, 1.3265/85, and 1.3360. It is possible that a long-term bottom is now in at the 1.2040/45 low set in late-July. Interim support comes in at 1.3020/25 (5-EMA), 1.2930/35, and 1.2820/30 (200-DMA, late-April swing high).

Safe_Haven_Currencies_Gain_Further_as_Aussie_and_Euro_Lead_Way_Lower_body_Picture_5.png, Safe Haven Currencies Gain Further as Aussie and Euro Lead Way Lower

BB represents Bollinger Bands ®

USDJPY: The USDJPY has steadied today as it remains supported by a relatively elevated US 10-year Treasury Note (2s10s spread remains wider post-FOMC). The June 1 swing low at 77.65/70 was broken on Thursday leading to a washout in new lows below 77.30, something repeatedly noted over the past weeks as a potential occurrence. A close above 78.60 leaves open the possibility for 79.10/30 (100-DMA, 200-DMA, descending trendline off of the April 20 and June 25 highs). A close below 78.60 has interim support at 78.10/20, 77.90, 77.65/70 (June 1 low), 77.45/50, and 77.10/15 (September low).

Safe_Haven_Currencies_Gain_Further_as_Aussie_and_Euro_Lead_Way_Lower_body_Picture_4.png, Safe Haven Currencies Gain Further as Aussie and Euro Lead Way Lower

GBPUSD: Nothing has changed with the pair putting in an Inside Day; though we caution that an Inside Day alongside a significantly overbought daily RSI reading could signal a turning point. “The key 1.6120/40 level cracked with ease on Friday and our bias looks longer for the foreseeable future. The weekly close above said level opens the door for a move towards 1.6400 in the coming days. The former April swing highs at 1.6260 (by close), 1.6300 (by high) are in focus, now that the descending trendline off of the April 2011 and August 2011 highs broke last week. Below 1.5930/40, near-term support comes in at 1.5860/75 (ascending trendline off of August 2 and August 31 lows), 1.5770/85 (late-August swing lows), and 1.5700.”

Safe_Haven_Currencies_Gain_Further_as_Aussie_and_Euro_Lead_Way_Lower_body_Picture_2.png, Safe Haven Currencies Gain Further as Aussie and Euro Lead Way Lower

AUDUSD: The AUDUSD appears to have failed for its breakout on Friday, with an Inverse Hammer/Shooting Star forming on the daily chart at the descending trendline off of the February 2012 and August 2012 highs coming in at 1.0540/50 today. Near-term resistance comes in at 1.0480/85, 1.0550/60, 1.0600/15 (August high) and 1.0630. Should we see a rally up towards 1.0600 again, another failure would mark a Double Top and signal a push for a test of 1.0250/70 (ascending trendline off of the June 1 and September 6 lows) then 1.0200/05 (100-DMA). Support comes in at 1.0425/45 (swing zone on 4-hour chart back to July 19), 1.0410 (mid-August swing lows), 1.0325 (200-DMA), and 1.0250/70.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, send an e-mail with subject line "Distribution List" to

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.