Market Analysis Summary: USD/JPY and Oil Prices

Overview

On April 17, 2026, Elior Manier provided an analysis of the USD/JPY currency pair amidst the backdrop of the ongoing US-Iran War, which has significantly impacted oil prices and the forex market. The article highlights the formation of a major Head & Shoulders pattern in the USD/JPY chart, indicating potential bearish trends.

Market Context

The US-Iran conflict, which escalated on February 27, has led to severe supply restrictions, particularly affecting oil prices. WTI and Brent Crude prices have surged over 100% since the conflict began, with current prices remaining approximately 35% higher than early February levels. This spike has particularly strained Asian economies reliant on crude oil imports, with jet fuel prices reflecting this increase.

Impact on Japan

Despite Japan's substantial strategic oil reserves, the Japanese Yen (JPY) has faced significant depreciation against the US Dollar (USD). The article notes that Japan's monetary policy has been inconsistent, with anticipated rate hikes diminishing due to slower inflation and mixed signals from policymakers. However, there is optimism as the conflict appears to be nearing resolution, with the Strait of Hormuz reopening.

Technical Analysis of USD/JPY

The USD/JPY pair is entering a corrective phase, with the potential for a significant move if the conflict resolves. The analysis includes a multi-timeframe examination:

• Daily Chart: The pair is testing the 50-Day Moving Average at 157.60, with bearish momentum indicated by the Daily RSI.
• 4-Hour Chart: Recent volatility shows buyers re-entering at lows of 157.533. The RSI is approaching oversold conditions, suggesting potential pullback opportunities.

Key Levels

Resistance levels are identified between 158.50 to 159.50, with major resistance at 160.00 to 160.40. Support levels include the March 19 lows at 157.533 and pivotal support at 156.00.

Conclusion

The analysis concludes with a cautious outlook on USD/JPY, emphasizing the importance of monitoring geopolitical developments and technical indicators for future trading strategies.

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