This marked another dangerous turning point in the Iran war which, has entered its fifth week.
Also on Sunday, Iran threatened to target American and Israeli universities in the Middle East as part of its war effort.
These unfavourable developments cast a shadow over Pakistan’s hopes for hosting peace talks between both sides.
Given the mixed messages from Trump about when the war could end, this could lead to more volatility as traders scramble to price the uncertainty.
DID YOU KNOW:
Last Friday, USDJPY crossed above 160 for the first time since July 2024…
WHAT DOES THIS MEAN?
Back in 2024, this level was defended twice by the Japanese government –
If history repeats itself and an intervention becomes reality, this could trigger an aggressive selloff on the USDJPY pair.
WHAT COULD MOVE USDJPY THIS WEEK?
The Iran conflict may fuel risk aversion, stimulating appetite for safe-haven assets like the Yen.
Note: Japan imports 90% of its crude from the Middle East.
Oil price volatility may also influence the Japanese Yen –
POTENTIAL SCENARIOS:
BULLISH: Another solid daily close above 160.00 may encourage an incline toward 161.00 and 162.00.
BEARISH: Weakness below 159.50 could see prices slip toward 158.00.