The FX Trader: Is the USD no longer a safe haven?

Technical and other observations for key pairs.

• EURUSD – clearer signal now for bulls to get involved as outlined above.
• JPY pairs – the JPY does not like rising yields, with the 10-year JGB testing the recent post-2008 highs overnight as US treasuries failed to serve as a safe-haven as well. EURJPY has almost hit 180.00. When does the EU call out Japan and threaten action? EURJPY at 180 is economic warfare.
• GBPUSD and EURGBP – with both GBP and USD weak, the GBPUSD outlook is murky. In the meantime, perhaps worth pointing out that GBP managed to sit through the brutal US equity market selling without weakening – it was the income tax news (noted above) that moved sterling overnight. Has the market gotten too bearish of sterling? Very critical phase for the currency over the next two weeks into and after the November 26 budget. EURGBP needs to hold this rally today or it looks reversal-ish.
• AUDUSD and AUD – Both AUD and USD weak, but AUD was flying high on recent news flow and didn’t appreciate the risk off, so it “outweakened” the US dollar.  A bearish shooting star candlestick yesterday, but one that is within the recent trading range that has persisted for months and months. Need to zoom out and wait for either 0.6450 break to downside or 0.6600 break to upside. AUDNZD now looks thoroughly capped after the huge shooting star reversal yesterday. 1.1400 needs to hold there to avoid an even bigger consolidation.
• USDCAD – 1.4000 has held after the attempt lower yesterday as CAD struggles under the weight of risk off and the crude oil selloff. Chart very pivotal here, another poke and close well below 1.4000 could setup waterfall declines, while any extension of ugly risk-off and move up through perhaps 1.4080 suggests another squeeze higher in choppy up-trend.

Next steps
We are in a fairly chunky risk-off event here – one that feels quite serious as the proximate cause seems to be “organic” rather than caused by any specific trigger like a Trump tariff tirade, etc.  With global equity markets under massive pressure, the correlations thus far in this risk off event are almost entirely at odds with my 20-plus years of experience in the currency market – so it feels like we are in a foreign land – will have to rely more on technicals and narratives as they emerge.

FX Board of G10 and CNH trend evolution and strength.
Note: If unfamiliar with the FX board, please see a video tutorial for understanding and using the FX Board.

While the US dollar has weakened in recent days – other currencies are weaker, so the broader picture remains muddled there, while CHF as safe haven remains rock solid (though with the dominant EURCHF at critical levels) and JPY weakness dominates for now. SEK and NOK putting in impressive resilience here despite the risk off tone.

Table: NEW FX Board Trend Scoreboard for individual pairs.

Our trend measure for EURUSD note yest flipping to positive, but will if EURUSD stays anywhere near 1.1600 in coming sessions, while USDCHF is set for a tardy flip to a negative trend after the recent sharp rally was a nasty head fake. Likewise, EURNOK trying to join EURSEK in starting a down-trend, but a bit tough to do when risk-off is the theme – and some important ranges to bust through in those pairs for a real trend to develop.