KEY POINTS:Japanese Yen rebounds following more intense verbal interventionJapanese PM Takaichi confirms the intention of dissolving parliament and calling snap electionsUS Dollar remains supported amid potential focus on US-Iran tensions Fed members support current patient stance with rate cuts expected later in the yearFUNDAMENTAL OVERVIEWUSD:The US Dollar continues toremain supported despite the recent soft US core inflation data as the market focus looks tobe elsewhere. It’s interesting to note that the greenback strengthened after renewedTrump’s threats against Iran following the CPI report and could explain the strengthgiven the risk-off flows we witnessed afterwards. Yesterday, Trump said thatthe killing in Iran was stopping and that there were no plans for executions.The market reacted by selling the dollar, which might have been a confirmationthat the focus has been indeed on Iran all this time. Unfortunately, we gotmixed reports after Trump’s comment and eventually most of the moves were fadedas the market erred on the cautious side.In terms of monetarypolicy, traders continue to expect 54 bps of easing by year-end. Fed memberscontinue to support the current patient and data-dependent stance. The outlookfor the USD remains neutral to bearish for nowJPY:On the JPY side, yesterday wegot a barrageof verbal intervention from Japanese officials after the price broke abovethe 2025 high. That helped to pause the selloff in the yen as we got a pullbackwhich eventually extended following the confirmation from PM Takaichi of animminent dissolution of the parliament to call snap elections in February. Unfortunately, this mightnot stop the depreciation in the Japanese Yen yet because the fundamentalsremain unfavourable for the currency amid expansionary fiscal policy and theBoJ's slow monetary policy normalisation keeping real rates in the negativeterritory. The central bank is stillplacing a great deal on wage growth, so wage data and spring wage negotiationsremain key. The market is pricing around 40 bps of tightening by year end. Theoutlook for the JPY remains bearish.USDJPY TECHNICALANALYSIS – DAILY TIMEFRAMEOn the daily chart, we cansee that USDJPY probed above the 2025 high around 158.87 but eventually fellback below the level following a barrage of verbal intervention from Japaneseofficials. We can expect the sellers to step in around these levels with a definedrisk above the high to position for a drop into the 154.50 support. The buyers,on the other hand, will want to see the price breaking higher again to extendthe rally into the 160.00 handle next.USDJPY TECHNICALANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we cansee that we have an upward trendline defining the bullish momentum. If we get apullback into the trendline, we can expect the buyers to lean on it with adefined risk below it to keep targeting new highs. The sellers, on the otherhand, will look for a break lower to pile in for a drop into the 154.50 supportnext.USDJPY TECHNICALANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we cansee that the price broke below the minor upward trendline that was defining thebullish momentum on this timeframe. This might be a signal of a bigger pullbackinto the next major trendline. There’s a counter-trendline defining the currentconsolidation. The buyers will likely continue to lean on it to keep pushing intonew highs, while the sellers will look for a break lower to increase thebearish bets into the major trendline. The red lines define the average daily range for today.UPCOMING CATALYSTSToday we get the latest US Jobless Claims figures. This article was written by Giuseppe Dellamotta at investinglive.com.