Geopolitical uncertainty pressures Dollar and stocks

Gregor Horvat Wavetraders

Good morning everyone. I hope you had a wonderful weekend.
As you know, the market turned a bit lower at the start of this new trading week, first due to political pressure from Trump on Powell and the Fed, and also because of rising concerns around potential military actions involving the US and Iran. All of this is shaping sentiment, which for now looks slightly bearish. But despite stocks turning lower, we are also seeing the dollar coming lower. Because if trust in the US system is lost then the dollar can weaken regardless of what stocks are doing. Looking at the dollar, we can see a very nice reversal so far, with a potential breakout still pending out of the corrective channel near 98.50. Such a move could open the door for a much stronger push lower on DXY. Of course, it would be much easier for the dollar to resume lower if stocks start to stabilize, which often happens by Tuesday when sharp Monday flows fade.

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Author

Gregor Horvat

Wavetraders

Experience Grega is based in Slovenia and has been in the Forex market since 2003.

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