Participants have been awaiting this weekend to see further peace developments in Iran. However, the deadlock remains. Markets opened this week on a cautious step, with a contained rise in Crude oil and a timid investor mood. Nonetheless, the US dollar is weakening, leading to a correction within the 2,000 pip range in USD/JPY.
Currency markets have certainly shown more restraint than the relentlessly strong equity markets over the past week.1
The US President Donald Trump extended the two-week ceasefire indefinitely2, proving to participants that the desire for a longer-run peace process is real, but the situation remains quite passive-aggressive.
Indeed, the US Army maintains a marine blockade on the Strait of Hormuz to chokehold the Iranian economy, as the Islamic regime previously held a monopolistic control on the world’s most important 10km wide maritime passage.
Using it throughout the war to maintain financial capabilities, Iran kept their oil sales to allied countries, such as China and Pakistan. However, with no other country being able to use the Strait despite this being a requirement for peace talks, the US imposed its own blockade.3
With Iranian oil reserves filled, the economy is under pressure to reach a proper peace deal sooner rather than later, a reason President Trump did not object to continuing the truce.4
Monday, early morning, saw progress, with Iran reportedly considering allowing other ships to cross the Strait of Hormuz5, which would eventually pave the way for a peace deal, with the nuclear threat being the number one condition for longer-run stability in the region.
After this news, the US dollar began to soften, and the reserve currency is the worst-performing major currency to start the week, easing from its prior week’s rallies despite WTI crude up another 1% in Monday’s early trading.6
USD/JPY has now been stuck in a 2,300-pip range (157.50 to 159.80) since March 20, after breaking a consistent uptrend.
The softer open for the dollar is pushing the FX pair to reject the upper bound of the range, with the RSI crossing the neutral zone to the downside and price action stalling as moving averages flatten.
Reactions to the mid-range pivot (158.30) will be closely monitored for bull/bear momentum.
USD/JPY 4H chart, April 27, 2026. Source: TradingView. Past performance is not indicative of future results.
Resistance levels
- 159.50 to 159.70 2026 range highs
- April 2024 160.00 to 160.40 major resistance
- 160.45 2026 Highs
- June 2024 resistance 160.70 to 161.00
Support levels
- 50 and 200 4H moving averages 159.170
- Mid-range pivot 158.75
- Range mini-support 158.35
- December support 157.50 to 157.80 (range lows)
Footnotes:
1 - https://www.investopedia.com/stock-market-today-dow-jones-s-and-p-500-04272026-11958985
2 - https://www.cfr.org/articles/trump-extended-the-iran-war-ceasefire-now-what
3 - https://www.theglobeandmail.com/world/article-iran-us-war-strait-of-hormuz/
4 - https://www.aljazeera.com/news/2026/4/24/how-long-can-iran-survive-the-uss-hormuz-blockade
6 - https://www.fxstreet.com/news/wti-drifts-higher-above-9350-on-hormuz-uncertainty-202604270434
This article and its contents are intended for educational purposes only and should not be considered trading advice. Forex trading is high-risk. Losses may exceed deposits.
