USD/JPY Forms a Major Head & Shoulders Pattern as Oil Crumbles – FX Analysis

USD/JPY is entering a corrective phase after oil prices and war risk initially pushed the pair higher. With the Strait of Hormuz reopening and oil (WTI/Brent) sliding, demand for safe-haven dollar strength has faded and a Head & Shoulders pattern has formed on USD/JPY, signaling potential longer-term downside. Technical indicators (daily RSI turning bearish) and tests at the 50‑day MA (157.60) suggest momentum may extend lower toward a measured-move target near 155.00 if the March 19 lows (157.533) break. Key resistance is clustered at 158.50–159.50 and the 4H 200‑period MA (~158.92). The market impact: peace/energy tension easing reduces oil-driven dollar support and increases the likelihood of yen appreciation in the near term, making short USD/JPY or pullback-buy setups around oversold conditions relevant for traders.