USDJPY consolidates below the key 160.00 figure as focus turns to US-Iran negotiations

FUNDAMENTAL OVERVIEWUSD:The US dollar weakened
across the board yesterday after Trump announced on his Truth Social account a
five-day ceasefire for negotiations toward “a complete and total resolution of
the hostilities.”However, the selloff in the
greenback was short-lived as Iran quickly denied the claims. Most notably,
Iranian Parliament Speaker Ghalibaf, who is reportedly the key figure handling
negotiations with the US, stated that no talks had taken place with Washington.These conflicting reports
have kept markets largely rangebound after the initial spike, with traders
waiting for clearer developments. For now, the US dollar is likely to remain
supported until there is an official de-escalation.JPY:On the JPY side, nothing
has changed as lack of progress on the inflation front and geopolitical risks
will likely keep weighing on the currency. Today, we got the latest Japanese CPI report, and the data showed further
easing in inflation with the Core figure falling well below the BoJ’s 2%
target. The initial outcome of the spring wage negotiations
points to a third straight fiscal year in which Japan sees average wage hikes
of above 5%. This should keep the tightening bias intact, but the central bank
might want to wait for the US-Iran war to end to avoid exacerbating growth
fears.USDJPY TECHNICAL
ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can
see that USDJPY pulled back from the 160.00
handle and started to consolidate above the 157.65 level that is now acting as
support. We can expect the buyers to keep stepping in around the support with a
defined risk below it to target a rally into the 161.95 level. The sellers, on
the other hand, will want to see the price breaking lower to pile in for a drop
into the major trendline around the 154.00 handle.USDJPY TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we can
see more clearly the consolidation between the 157.65 support and the 159.75
resistance. Traders will likely continue to play the range by buying at support
and selling at resistance until we get a breakout on either side.

USDJPY TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, there’s
not much we can add here as the buyers will have a better risk to reward setup
around the support, while the sellers will gain more conviction on a break
below the support. The red lines define the average daily range for today. UPCOMING CATALYSTSToday we have the US PMIs. On Thursday, we get the latest US Jobless Claims
figures. The focus remains on the US-Iran war and now the negotiations, so keep an eye
on the headlines.
This article was written by Giuseppe Dellamotta at investinglive.com.

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