The USD/JPY trading pair kept up in its losing track during the early European session and slid to a new three-week low close to the 114.40 zones.
USD/JPY price chart. Source TradingView
The pair saw a lot of selling in the early period of Thursday’s trading, and it broke out of the overnight consolidation as the Ukrainian crisis worsened. The President of Russia, Vladimir Putin, has given the go-ahead to what he termed “a special military operation” in Donbas for a peacekeeping mission and protection of Russians in Ukraine. NATO has officially confirmed the invasion of Ukraine.
Geopolitical Tensions Cost the Market
The Russian invasion of Ukraine has subsequently triggered a huge sell-off across the global stock market, and it has been a boost for the Japanese yen as a safe-haven commodity, but it has translated into a weighty downward pressure on the USD/JPY trading pair.
In the most recent developments of Thursday, several reports have emerged of Russian troops attacking Ukrainian border towns around Belarus. Importantly, Ukrainian border control has also reported attacks coming in from the border with Crimea. The American President, Joe Biden, in a statement, has called the attacks on Ukraine “unprovoked and unjustified,” and he added that the United States and allies would place more severe sanctions on Russian interests.
The American President’s statement spiked concerns over the possibility of further escalations in the already tense relationship between the West and Russia, and it has put investors on the watchful edge and maintained the Japanese yen as a safe-haven asset.
Positioned to Buy the Dip
Bears took more cue from the sharp decline in the American Treasury bond yields, although if there is a strong enough pickup in the US dollar demand, it might help to limit the impending losses for the USD/JPY trading pair, even for the time being.
The saga going on between Russia and Ukraine seemed to have punctured the hope for an aggressive monetary policy tightening by the US Federal Reserve to fight the country’s increasing inflation. This, alongside the general run for financial safety, has taken the American bong yields to lower depths and contributed more to the heavily offered notes around the USD/JPY pair.
Spot prices are doing well with a good distance of the 100-period simple moving average support, which is presently around the 114.30 zones. It is followed by a very close margin by the monthly oscillation low, which was around the 114.15 zones and the 114.00 mark. A clear break under the latter will prepare the stage for more short-term depreciating movement for the pair.
Traders are currently expecting the Advance US GDP data for some push, although the main focus will remain on geopolitical events.