- USD/JPY: markets quiet start of the week, shrugging off Syria noise.
- USD/JPY: risk sentiment mixed, yen at key technical juncture.
On geopolitical drivers, USD/JPY ended the week on the offer from 107.77 early morning US highs and down to close at 107.33. At the same time, the dollar was broadly mixed while traders took caution over the potential military strike action in Syria.
Currently, USD/JPY is trading at 107.45 with a high of 107.61 and a low of 107.37, (recent Tokyo opening dip). USD/JPY started out on the front foot with some early pips to collect in what markets had been expecting to be a risk-off picture from the early Asia open. However, the underbelly of the matter is resurfacing as we progress and markets will be paying close attention to it.
Risk tone: well, so far so good, just another attack on Syria, market moves on . . .
Following the end of last's week trade where the threats from Trump over Syria were heightened, there were three subsequent targets hit in Syria over the weekend, with more than 100 missiles fired against what they say were Syrian chemical weapons facilities.
Valeria Bednarik, chief analyst at FXStreet explained that the daily chart for the pair shows that it holds around March's high but that it's also developing well below a bearish 100 DMA, this last around 108.60:
"The Momentum indicator in the mentioned chart has turned sharply lower and aims to enter negative territory, but the RSI presents a modest upward slope around 58. Shorter term, and according to the 4 hours chart, the pair is skewed to the upside, as it holds well above its 100 and 200 SMA, both converging around 106.20, while technical indicators hold above their mid-lines with opposite directional slopes. Still, risk sentiment is what will lead the way, at least during the Asian session.
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