USD/JPY stabilizes close to 109.10 ahead of Trump’s announcement on Iran

• Trump is widely expected to withdraw from the Iranian nuclear deal and will speak at 18:00 GMT this Tuesday.
• The USD/JPY is stuck in a three-day range between 108.70 and the 109.40 level.

The USD/JPY is trading at around 109.10 virtually unchanged on Tuesday as Trump is scheduled to announce his decision on the Iranian nuclear deal at 18:00 GMT. 

The USD/JPY retreated from daily highs at 109.35 ahead of the US President’s decision on the Iran nuclear deal which was negotiated by Barack Obama in 2015.

A US official said that in recent days the US has been working on withdrawing from the agreement, according to CNN. It is also expected that Trump will impose new sanctions on Iran but they might take several months to go into effect and a “grace period” would give room to further negotiations.

The USD/JPY pair is stuck in a three-day range as market participants are unsure of what will exactly happen on a geopolitical level with Iran. The yen is considered a safe-haven currency in times of turmoil. 

looking back, in 2015, the Iran agreement lifted economic sanctions on Iran and in exchange, the oil-producing country would limit its nuclear program and allow inspections of its atomic facilities. However, Trump finds the agreement too light and is widely expected to impose harsher sanctions on Iran.

USD/JPY 4-hour chart

The main trend is bullish and resistances are seen at 109.40 top of the range and the 110.00 handle while supports arepriced in at 108.70 lower part of the range and at 107.79 swing high.