The Japanese Yen (JPY) traded flat above the 159.00 level against the US Dollar (USD) on Tuesday, following several days of USD strength that came after a recent intervention which had briefly boosted the Yen. The USD/JPY pair has since retraced most of its sharp, intervention-driven decline, with ongoing pressure attributed to elevated oil prices and a firm US Dollar [1].
Geopolitical developments in the Middle East remain in focus, as Iran’s Security Chief Mohsen Rezai outlined a series of conditions for the United States, including ending the war, releasing blocked Iranian funds, and lifting economic and trade sanctions. Rezai also clarified that any Iran-Oman agreement on Strait of Hormuz shipping would be separate from the issue of closing the strait [1].
Looking ahead, the US Consumer Price Index (CPI) report, scheduled for release on Wednesday, is expected to be the main market catalyst of the week. July’s inflation is anticipated to be lower than June’s, which could potentially temper market expectations for further Federal Reserve (Fed) rate hikes [1].
From a technical perspective, USD/JPY is trading at 159.24, maintaining a constructive near-term bullish bias as it remains above the 20-period Simple Moving Average (SMA) at 158.63. Key support levels are identified at 159.14, 158.95, and 158.81, while resistance is seen at 159.40 and the 100-period SMA at 160.83. The Relative Strength Index (RSI) around 61 indicates firm but not extreme upside momentum [1].
CONCLUSION
The Japanese Yen has stabilized above 159.00 against the US Dollar, with markets awaiting the upcoming US inflation data for further direction. Technical indicators suggest a bullish bias in the near term, while geopolitical tensions and US monetary policy remain key factors influencing the pair.