It’s always darkest just before dawn.

That was the lesson in many markets today as the weekend looked like we could be witnessing a new round of escalation but that’s been followed with actions and words that suggest deescalation. Even in the past few minutes there is a report that Israel sent messages to Iran that it wants to wrap up attacks in ‘days’.

If you’re a fan of world peace, it’s all good news but if you’re a fan of the US dollar, it’s not. Or at least it wasn’t today as the US dollar started very strong but has since been swamped.

USD/JPY was up nearly 200 pips at its peak today but is now lower by a handful. All of the selling has been in US hours, leaving quite a reversal candle on the chart with a couple of hours of trading remaining.

Even with this move, you could argue that USD/JPY should trade all the way back to 144.00 or lower as the dust settles and the oil can go all the way back to $64.

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