Potential USDJPY Double Top On Watch
Reversal Signals?
USDJPY is on watch this week with potential for a double top pattern to form around current levels. Price recent broke above the initial 2026 highs around the mid 159 area before reversing back below, and with bearish divergence showing on momentum studies readings, we could be seeing the start of a reversal structure forming. For now, USD remains heavily tied to developments in the Middle East and oil flows. The sharp push lower in crude this week in response to Trump’s ceasefire news is a good indicator of how quickly we could see recent moves reverse on any concrete news of a move towards peace between the US and Iran. On the other hand, if Trump’s reverses course and goes ahead with earlier planned attacks on Iran, this could fuel a fresh leg higher in crude taking the Dollar back up with it.
Near-Term Outlook
For now, range-bound action appears likely while traders await a clear directional catalyst. What looks increasingly clear though is that the US is looking for a road out of this conflict so the question is whether Iran is willing to negotiate or wants to push on given the leverage it has with the Strait of Hormuz and its impact on crude prices. As such, the coming days could prove pivotal for price action over the next few weeks as the US will either be met with compromise, have to double down on its threats or simply walk away if Trump can find a positive way to frame that action.
Technical Views
USDJPY
For now, USDJPY remains atop the 157.87 level, in the upper half of the bull channel. While that support holds, focus is on a fresh push higher towards the 161.95 level next. If we break lower, however, focus turns to support at the 154.65 level next where the bull channel lows are also.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.