• USD/JPY moved higher on Monday after upbeat US jobs data on Friday and renewed Middle East conflict boosted the US dollar.
• Geopolitical tensions in the Middle East escalated as Iran fired missiles at Israel in response to Israeli strikes on Beirut, with Israel also launching retaliatory strikes.
• Meanwhile, data released on Friday showed Japan’s foreign reserves posted a record monthly drop in May, as authorities sold foreign assets to fund the country’s largest-ever currency intervention a month earlier.
• On the monetary policy front, the Bank of Japan is widely expected to raise interest rates later this month as policymakers contend with persistent inflationary pressures driven by higher energy costs.
• Immediate resistance is located at 160.44 (Daily high), any close above will push the pair towards 160.81(23.6%fib).
• Support is seen at 158.29 (SMA 20) and break below could take the pair towards 158.72(38.2%fib).
Recommendation: Good to buy around 160.10, with stop loss of 159.30 and target price of 160.50
