The USD is trading mixed to start the session. The USDJPY is backing off its highs as it approaches the 2024 peak, with Japanese officials — including the Bank of Japan — growing increasingly concerned about currency weakness. That proximity to a key technical level, combined with policy sensitivity, is helping to stall the upside momentum.

Elsewhere, the greenback is firmer against both the EUR and GBP, keeping the broader dollar tone supported.

On the geopolitical front, President Donald Trump said on Truth Social that negotiations with the new regime are making progress, but struck a more aggressive tone by warning the U.S. could “obliterate” key energy infrastructure — including Kharg Island, a critical oil export hub — and even desalination facilities. That rhetoric underscores that the game of chicken continues, with markets balancing diplomacy against escalation risk.

Despite the tension, equities are leaning higher. The Dow is up around 300 points, the Nasdaq is higher by roughly 150, and the S&P is up about 40 points, suggesting investors are, for now, focusing on the prospect of progress rather than worst-case outcomes.

In rates, yields are moving lower, with the 10-year down about 6.7 basis points and the 2-year off by roughly 5.1 basis points — a supportive backdrop for risk assets.

Crude oil has backed off earlier highs, slipping from around $103.38 to near $101, as traders weigh supply risks against the evolving geopolitical narrative.

In the video above, I break down the technical picture for the three major currency pairs — EURUSD, USDJPY, and GBPUSD — and outline the key levels that are defining bias, risk, and potential targets.