USD/JPY Supported by Rising Oil Prices and Middle East Tensions

Rising tensions in the Middle East are keeping crude oil prices elevated, and this is currently the main driver of the USD/JPY direction. Higher oil prices are pushing US yields higher while weakening the yen due to Japan’s dependence on imported energy. Because of this, the pair is trading more like a risk asset than a safe haven right now.

Technically, USD/JPY has broken above the 159.30 resistance, which may now act as support. As long as the price holds above this level, the next upside targets are 160.00 and then 160.46. Momentum indicators slightly favor the bulls, with RSI moving higher and MACD still positive.

However, the market remains headline-driven. If oil prices fall or geopolitical tensions ease, the pair could drop back below 159.30, opening the door for a move toward the 50-day moving average near 158.

USD/JPY Daily Chart

Bottom line: Oil prices and Middle East developments remain the key swing factors for USD/JPY direction in the near term.