USD/JPY edges up above 159.00 as the Strait of Hormuz curbs risk appetite
The pair managed again to hit another correction while still facing the support zone of 157.25-65, which could hold prices inside this trading zone toward resistances 160.20 or 161.95. Above 161.95 the market could enter a new uptrend wave with first target toward 163.80.
Japanese Yen edges higher on intervention fears; USD/JPY eyes weekly low on weaker USD
USD/JPY steady below 160.00 amid Japan intervention risks
The American currency moved lower as traders focused on the weak NAHB Housing Market Index report.
The pair managed again to hit another correction while still facing the support zone of 157.25-65, which could hold prices inside this trading zone toward resistances 160.20 or 161.95. Above 161.95 the market could enter a new uptrend wave with first target toward 163.80.
The US dollar remains under pressure, testing key support levels amid expectations of easing geopolitical tensions. The market continues to price in the possibility of renewed negotiations between the US and Iran, reducing demand for the dollar as a safe-haven asset and supporting riskier instruments.
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Falling oil prices put additional pressure on the American currency.
As the week progresses, the yen has once again shown renewed bullish strength in the short term, which is reflected in USD/JPY price action, with the pair declining by at least 0.5% in favor of the yen. The selling pressure that has begun to dominate the pair is partly driven by the improvement in market confidence, supported by the relative calm surrounding the Middle East conflict.
Markets were very eager to pile into the de-escalation narrative, and even the faintest hint that the US Hormuz blockade might be nudging things back toward talks has been enough to put crude oil, and the dollar, under a fair bit of pressure, providing relief for risk assets. Trump's remark that Iran had reached out to restart negotiations only added fuel to the move, prompting another round of dollar selling.