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The US Dollar Index measures the value of the US dollar against a basket of six major currencies. According to this index, the US dollar was down 0.17% to 89.17 by 03:25 AM ET (07:25 GMT).[1]
The US and Western Allies are planning to launch a possible military strike on Syria. It could be inferred that the turbulence in Syria together with the trade war between the US and China may have a negative effect on the US dollar. Due to the alleged chemical attack, there is a considerable uncertainty for the US dollar. In order not to accelerate the tensions between Russia and the US, Russia is striving to dissuade the US from taking any military actions.
A possible outcome of those geopolitical events is that the tension seems to escalate, a fact that may urge investors to move their investments to a safer and at least more stable instrument from a fundamental point of view. Normally, global events have more volatile characteristics and may lead to unexpected results due to their growing uncertainty.
It could be noticed that these effects apply to the US Dollar and related instruments, such as commodities and oil. The expected reaction would be to observe the fundamental and technical aspect of these instruments closely so that to avoid any unexpected result.
Due to uncertainty fear is thriving and this could be the main reason why a pair falls and escalates.
Technical Analysis on USDJPY
Based on the Ichimoku system, the price seems to move down. Provided that the components of the system are examined, it could be noticed that the price appears below the cloud and, the Kijun Sen and Tekan Sen are not in a bear formation yet. The Chikou Span seems to be inside the price. If the lines are in a bear formation and the Chikou Span appears below the price, then we could consider looking for a potential bear signal.
About the Author:
Marios Athinodorou is TeleTrade’s market analyst and commentator. Apart from being an experienced trader, Marios is an advanced technical analyst and is interested in trading psychology. He has 7 years of trading expertise in Forex and CFDs, providing insights to share with all kinds of traders, from beginners to experts. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars, here.
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