• USD/JPY dipped on Monday as the dollar weakened, driven by growing expectations that a U.S.–Iran agreement could eventually be reached.
• U.S. President Donald Trump said the U.S. military began a blockade of ships leaving Iran's ports on Monday, but added that Iran had been in touch and wanted to make a deal.
• The series of comments "has brought some relief to the markets, as it has renewed the possibility of a diplomatic resolution.
• The yen found added support from potential intervention risks as USD/JPY tested the 160 level, previously associated with action by Japanese policymakers..
• Meanwhile, BOJ Governor Kazuo Ueda highlighted the importance of monitoring the economic impact of the Iran conflict, cautioning that higher oil prices may dampen Japan’s growth prospects.
• Immediate resistance is located at 159.23(SMA 20), any close above will push the pair towards 160.24(23.6%fib).
• Support is seen at 158.17 (38.2%fib) and break below could take the pair towards 157.78(Lower BB ).
Recommendation: Good to buy around 158.10, with stop loss of 157.50 and target price of 159.70
