USD/JPY extends the consolidation near cycle highs amid US-Iran crisis, stealth interventions risks
USD:
The US dollar has been under pressure in the past few days following the surprisingly soft US inflation figures. The data triggered a dovish repricing in interest rate expectations with traders scaling back significantly the probabilities for a rate hike in July which is now comfortably off the table.
The Fed is now expected to raise interest rates in October at the earliest with a fully priced hike in December. The US-Iran crisis in the background is keeping inflation risks skewed to the upside, so the downside in the greenback should remain limited without a clear de-escalation.
JPY:
On the JPY side, not much has changed fundamentally other than the renewed US-Iran conflict and the closure of the Strait of Hormuz that is keeping oil prices more elevated and reigniting inflation and growth worries.
The Japanese officials threat to target speculators with stealth interventions has helped to slow down the depreciation, but that might not stop the yen from falling into new lows versus the US dollar if the current US-Iran situation drags on for much longer or even worsens.
USDJPY TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that USDJPYcontinues to consolidate below the cycle high around the 162.85 level with a bullish tilt. If the price reaches the cycle high, we can expect the sellers to step in with a defined risk above it to position for a drop back into the 160.50 support. The buyers, on the other hand, will look for a break to increase the bullish bets into new highs.
USDJPY TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see the recent price action might have formed an ascending triangle and the series of higher lows suggests the bullish bias remains intact. The buyers will likely continue to lean on the trendline to keep pushing into new highs, while the sellers will look for a break to extend the pullback into the 161.50 support next.
USDJPY TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s not much we can add here as the price is trading right in the middle of the key levels. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today, we conclude the week with the University of Michigan Consumer Sentiment survey, but the focus will remain on US-Iran headlines.
This article was written by Giuseppe Dellamotta at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
FX初心者には必須 無料のうちにGET！
