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Risk Haven Assets Slip on China Talk Hopes18 February 2019 by Dave Evans

Morning Report: 07.00 London

The Japanese yen and the US dollar index are on the back foot as traders bet on a positive resolution to extended trade talks. The dollar index is following up Friday’s losses.

The EUR/USD struggled on Friday in volatile trading, but ultimately closed higher, with follow-up buying this morning. The GBP/USD is following up a solid Friday which saw support around 1.2800 hold, with a gap higher this morning. The EUR/GBP remains below Friday’s close and is hovering just above support around 0.8750 as Brexit hopes remain.

The AUD/USD is also performing well after last week’s surprise boost for neighbouring NZD/USD, with follow on buying this morning.

The USD/CAD is slipping back again for the second straight day, while the USD/CHF has slipped below the 1.0050 level after failing to push through 1.0100 last week.

The USD/JPY is unchanged so far, while the GBP/JPY posted an opening gap higher that is holding thus far. The EUR/JPY is also positive after three days of losses. Meanwhile, the AUD/JPY also made an opening gap, posting gains of support around 78.00.

Coming up today

Today is a public holiday in the US.

The German Buba monthly report is at 11.00.

Trade Idea

Trade talks aside, the USD/CHF has struggled to push past the 1.0100 level in recent months, with the 1.0000 level acting as a magnet for price action.

Traders are taking money off the table with the dollar, while the Swiss franc always has the potential for gains in this risk filled climate.

Risk Haven Assets Slip on China Talk Hopes

A good way to play this is a LOWER trade predicting that the USD/CHF will close below 1.0025 in 14 days for a potential return of 101.50%.

Risk Haven Assets Slip on China Talk Hopes