DXY by Swissquote — TradingView

On Saturday, February 28, the military reported the following key fundamental factors:

• The U.S. dollar (DXY) is the only major currency on the FX market that has been rising since the FX market closed on Friday, February 27

• European currencies are under pressure, particularly the euro and the pound, while the Swiss franc is not acting as a safe haven at all.

• Currencies in Asia’s major economies suffered heavy selling, which makes sense given their reliance on energy imports through the Strait of Hormuz (Korean won, Indian rupee, Japanese yen)

• However, given China’s reserves, the yuan has shown more resilience than the Indian rupee
Oil strategy is much higher than India

• In contrast, both major and emerging commodity-linked currencies have shown relative flexibility. he insists
Australian dollar, Canadian dollar and Brazilian real, as these countries are considered major exporters of liquefied natural gas (LNG) and oil to China (especially Australia) and are also geographically far from military operations zones.

The chart below shows the performance of major foreign exchange (FX) currencies and major emerging currencies since the start of military operations in the Middle East on February 28:

However, a question does arise: does the rise in the US dollar (DXY) since the beginning of the conflict confirm a reversal of the uptrend in the medium to long term? In other words, will the dollar continue to rise in the coming months in the foreign exchange market?

Geopolitics, US inflation and the Federal Reserve (the US central bank) are the main drivers in answering this question. But technical analysis should also be considered, which highlights the USD pivot level against a basket of major currencies (DXY) at 101/102 points. If the market breaks through this resistance, the dollar could continue to rise in the coming months. But for now, this has not happened yet, and the US dollar has yet to confirm a bullish reversal in the medium to long term.

The chart below shows the weekly Japanese candlesticks for USD (DXY)

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