FUNDAMENTAL OVERVIEWUSD:The US dollar has beengradually strengthening since Tuesday as the US-Iran stalemate led to some profit-takingon bearish dollar bets. There’s still no clear sign of a second round of talksafter Iran refused to send a delegation to Islamabad on Tuesday due to the USblockade in the Strait of Hormuz. The only good thing that isholding everything from puking hard is the ceasefire. Just today the Israel andLebanon ceasefire got extended by another three weeks and the US-Iran ceasefirelooks to be open-ended. In the meantime, everyonehas been replenishing their military stockpiles, with the US sending more shipsand military forces to the Middle East. Traders will need to stay nimblebecause things can get ugly very quickly. The price action continuesto be driven by US-Iran headlines, and this is unlikely to change until we getan official resolution. JPY:On the JPY side, thecurrency has been mostly driven by US dollar strength and weakness as Japanesemacro conditions continue to point towards a neutral policy. Today, we got the latestJapan’s CPI report, and the data didn’t change anything for the BoJ. Core inflationis still hovering below the 2% target and there’s no sign of an acceleration tojustify urgent rate hikes. The US-Iran war hasn’t onlyput upward pressure on inflation but also downward pressure on growth. The endof the war would certainly be good news for the economy and should liftbusiness sentiment which might eventually translate into favourable conditionsfor a rate hike, but for now we haven’t got an official resolution.The BoJ will want to waitfor the end of the war and let things settle before considering a rate hike. Ifthe war ends and economic data picks up, they might lay the groundwork for arate hike in June, although it still looks too early. USDJPY TECHNICALANALYSIS – DAILY TIMEFRAMEOn the daily chart, we cansee that USDJPY continues to consolidatebetween the 158.00 support and the 160.00 handle. If we get another pullback fromthe recent highs, we can expect the buyers to step in again around the support witha defined risk below it to position for a rally into the 162.00 handle. Thesellers, on the other hand, will want to see the price breaking lower to openthe door for a drop into the major upward trendline around the 155.00 level.USDJPY TECHNICALANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we cansee the price broke above the downward trendline that was defining the bearishmomentum into the support. The price action between the support and thetrendline formed a descending triangle and this breakout might have opened thedoor for a move into the 162.00 handle. The buyers will likely lean on theminor upward trendline defining the current momentum to keep pushing into newhighs, while the sellers will want to see the price falling back below thedownward trendline to pile in for a drop back into the support.USDJPY TECHNICALANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, there’snot much we can add here as the buyers will have a better risk to reward setup aroundthe upward trendline, while the sellers will look for downside breaks to pilein and target the support zone. The red lines define the average daily range for today. UPCOMING CATALYSTSToday we conclude the week with the final University of Michigan Consumer Sentimentreport but the focus will remain on US-Iran headlines. This article was written by Giuseppe Dellamotta at investinglive.com.