I feel like the market is on a knife edge this week, the fear and greed index is in the “extreme fear” zone and NVIDIA, the most watched AI company, will announce its earnings on the closing bell Wednesday.
This is all adding the fuel to the Swiss Franc and the United States dollar as risk off markets are finding support.
This is how the currency strength meter looks this week:
Strong Currencies
My currency strength meter highlights these currencies as the strongest as of last week:
CHF: Markets switched back to the safe haven of the Swiss Franc last week, and it shows as it reaches +7 on the meter. In Switzerland the central bank is not likely to step in as they pursue a tariff deal with the US and would not want to rock the boat.
USD: Now the shutdown is over we could expect a little US weakness, but now attention will turn to back dated data and whether it gives us an insight into what will happen next. The CME fedwatch tool is now in favour of no cut.
Weak Currencies
Looking at the opposite side of the strength meter now, these are the weakest of last week:
GBP: No changes here, the UK unemployment rose to its highest levels since 2020 and GDP wasn’t much better. The UK now faces a real possibility of stagflation if the inflation rates do not improve over the next couple of months.
NZD: There is no improvement in the kiwi although a lower timeframe shows the currency gaining some strength. But from a swing trading perspective this currency is still on my list of weak.
Markets to watch
Based off of the above these are the currency pairs on my trading watchlist:
Bullish | Bearish |
GBPUSD | |
NZDUSD | |
GBPCHF | |
NZDCHF |