FxWirePro :USD/JPY hovers near 40-year high, bias bullish

USD/JPY hovered near 40-year low on Tuesday as traders have focused on broader global developments. Renewed military conflict between the United States and Iran, and growing concerns that higher energy prices could...

• USD/JPY hovered near 40-year low on Tuesday as traders have focused on broader global developments. • Renewed military conflict between the United States and Iran, and growing concerns that higher energy prices could fuel inflation. • Rising geopolitical tensions have lifted crude oil prices, reinforcing fears that inflationary pressures in the United States could remain elevated for longer than previously expected.

• However, market participants remain cautious, with traders wary that Japanese authorities could step into the foreign exchange market should the yen weaken further. •

Meanwhile, expectations remain intact that the Bank of Japan will deliver another interest rate hike later this month, although the prospect has so far been insufficient to offset the widening yield advantage enjoyed by the United States. • Immediate resistance is located at 162.78 (23.6%fib), any close above will push the pair towards 163.22(Higher BB). •

Support is seen at 161.81(SMA 20) and break below could take the pair towards 160.78 (38.2%fib). Recommendation: Good to buy around 162.30, with stop loss of 161.50 and target price of 162.80