Lets take a look at the longer term pictures is some USD-crosses. Is it only against the EUR the USD is headed higher? NO! Absolutely not. Even against some of the stronger currencies and some of the newcomers among the safe-haven currencies like the NOK and SGD the USD is headed higher.Above you can see the longer term picture of EUR/USD and the way I count it. I expect, that we have just finish wave [B] and should now see wave [C] down. Wave [C] should ideally decline below the low of wave [A] at 123.18.
USD/CHF the former safe-haven king in the currency world, but the determination, that the Swiss Central Bank (SNB) has laid down to keep EUR/CHF higher than 120 has ended this status (at least for now...). Will the SNB succeed you might ask. I believe they will. If my counts for the CHF-crosses is correct we have just seen major tops across most of them. The timing of the SNB this time was absolutely perfect. They hit when the market was most vulnerable.Longer term USD/CHF is headed back towards the triangle apex around the 105 area.
Cable (GBP/USD) broke down a little sooner than I expected, but in the bigger picture nothing has changed. We are working on leg-D of the triangle, which should terminate around the 150 area, setting the stage for the final E-leg. When the E-leg is done we will the thrust out of the triangle.
NOK is the new star on the currency haven, but even here the USD is showing strength and we have just seen a break above the resistance-line, which do call for a move higher towards the long term falling trend-line. I would like to see a break below resistance at 563 to confirm the rally high, but I expect it will only be a "minor" obstacle on the way higher.
SGD has been on of the Asian stars, but even here too we have see a break above the resistance-line calling for a move higher towards next important resistance at 128.45. If the resistance at 128.45 is broken too, the next target is the long term falling trend-line, which currently is near the 144.35 area.
If we turn towards the commodity-currencies we have seen the USD break out against both the BRL (Brazilian Real - not shown) and CAD, which is the first warning, that even these "safe-haven" currencies (they are not safe-haven currencies as CHF used to be, USD and JPY).There are allot of reasons why they have done well, but we have now seen the first two commodity- currencies crack and the ZAR (South African Rand) will soon and the Aussie and Kiwi dollar looks as they are in a topping process see the link below.
Overall we can conclude that the USD is turning back as a safe-haven currency as the storm gathers strength. This is not the perfect storm yet, but it will not take much for it to be the perfect storm like we saw it in 2008. So take care out there and don't overexpose your self to risk right now.
If this turns in to a perfect storm, we will hear allot of "Black Swan" stuff, but I don't see this as a Black Swan event. It has been building since early 2009 and it has more or less been a question of when the government had to let go and let the economic cycle do its job. I'm not wiser than governments, the Central Bankers or many economist (I have no Nobel prize), but I do think that they have misused their gun-powder for all the wrong reasons, which probably will make this downturn longer and harder than it else could have been.
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