16th July, 26' - It is Tuesday morning London session and I am currently looking at USDJPY long position on hourly timeframe, for a quick 30pips.

My reasoning behind the long position:

Softer-than-expected US Inflation data have triggered repricing of the Fed, so much so that money markets shifted to just pricing in one 25bps rate hike by the year-end. The reaction has already priced in and it was much more notable across the rest of the G10 currencies, however, limited movement was seen in the yen.
Geopolitics are still in the focus as US continues to strike Iran, which raises questions about the closure of Strait of Hormuz. It has resulted in oil prices to rally back up, with the current price hoovering around 80pbl. It is known that Japan is highly sensitive to the oil prices due to it's net-import of energy status. 
BoJ is maintaining slight tightening bias, however doing it too fast can have negative impact on the economy. The rate differentials between the two economies clearly favours the USD, with still elevated US Treasury Yields, there is no prospects for the pair do drive lower for now. All things being equal, I am maintaining the bullish view on the pair going into the week-end. 


The Retail Sentiment is increasing it's short positions in the pair, which supports my bullish bias:


CLOSED July 16th '26 - A quick 1.5% today, helped by the increasing geopolitical premium. The escalation is potentially broadening with Houthi rebels reportedly preparing to shut the Bab el-Mandeb Strait on behalf of Iran. On top of that the Houthi leader says If Saudi Arabia turns to all-out aggression against Yemen, all of Saudi Arabia's energy facilities and its vital facilities will be targets for missiles and drones.
The reports elevated oil prices and USD caught a tailwind.