Worldwide Equity Decline Continues To Boost Safe Haven Currencies

A second day of declines in stock market around the globe continue to fuel demand for the dollar and the Japanese Yen.

This is a period when many companies report their earnings, a period that creates tension and fear in stock markets which in return are translated into safe haven flee in the Forex market.

The Yen is trading once again under 100 versus the dollar, still we can consider this retrace as a normal correction to the recent uptrend. Such correction can drag us down as far as 97 if stocks will continue to decline next week. However, the overall direction of the trend is still bullish and will stay so for as long as we are trading above 97.

The British pound is also falling against the dollar, but at least for now the market seems reluctant to push GBPUSD lower than 1.46.
We can observe EURGBP and conclude the pound still has the upper hand against the Euro, thus we expect it to be a bit less vulnerable to the recent dollar strength when compared with EURUSD.