Risk aversion is once again the theme du jour. The S&P is close to its 200-day moving average, oil is consolidating declines in the $62.50 region Emerging markets are suffering as well, with hopes for a global rebound dimming and prospects of a “W” shaped recovery coming back into focus.
As risk positions are shed, the dollar and other low-yielders come back into demand. EUR/JPY is under heavy pressure as is EUR/CHF, a reflection of interest from those in the “carry trade” cutting out those positions and heading to the sidelines. EUR/JPY is at 132.10, breaking below the 132.15 London low in the cross. EUR/CHF is at 1.5147, from 1.5195 highs and below levels where the BIS was a rumored buyer earlier in the day (1.5160).
1.3905/10 is next support for EUR/USD.
