The USD/JPY currency pair experienced modest intraday losses, moving further away from the over one-week high near 159.70 reached the previous day. During the early European session, spot prices dropped to the 159.00 region, marking a fresh daily low, though the downside appears limited at this stage [1].
The decline in USD/JPY was attributed to a temporary extension of the US-Iran ceasefire, which prompted some selling pressure on the US Dollar. This, in turn, exerted downward pressure on the pair. However, ongoing economic concerns related to the standoff over the Strait of Hormuz and market expectations for a delayed Bank of Japan (BoJ) rate hike are seen as factors that could continue to undermine the Japanese Yen and help limit further losses in the currency pair [1].
Technical analysis indicates that USD/JPY remains resilient below the 23.6% Fibonacci retracement level of the recent move up from last week's swing low around 157.60. The pair bounced off the 100-period Exponential Moving Average (EMA) on the 1-hour chart. Momentum indicators such as the MACD have slipped marginally below zero, and the RSI is near 48, signaling neutral to slightly soft momentum. If selling pressure accelerates, deeper pullbacks could expose the 38.2% retracement at 158.85, with further layered Fibonacci supports at 158.60, 158.36, and 158.01, and the 157.57 swing low as a more distant structural floor [1].
No explicit forward-looking statements or analyst opinions were provided in the article, but the technical setup suggests that while upside momentum is fading, key support levels may limit further downside in the near term [1].
CONCLUSION
USD/JPY has retreated from recent highs amid a softer US Dollar and geopolitical developments, but technical support levels are helping to limit losses. Market participants are watching for further developments in US-Iran relations and Bank of Japan policy expectations, which could influence the pair's direction in the coming sessions.