USD/JPY Price Analysis: Eyes more upside above 137.00 as BoJ continues ultra-loose policy

The USD/JPY pair is displaying a volatility contraction around 136.65 after sheer volatility inspired by the continuation of an ultra-easy monetary policy by the Bank of Japan (BoJ). BoJ Governor Haruhiko Kuroda continued expansionary monetary policy as the domestic demand and wages have failed to spurt inflation in the Japanese economy.

The US Dollar Index (DXY) is gathering strength in extending its recovery above the immediate resistance of 105.35. The USD Index has been extremely quiet as investors are awaiting the release of the United States Nonfarm Payrolls (NFP) data. S&P500 futures are continuously accelerating losses as fears of aggressive interest rates by the Federal Reserve (Fed) are skyrocketing.

Meanwhile, the demand for US government bonds is soaring, which has trimmed the 10-year US Treasury yields further below 3.82%.

On an hourly scale, USD/JPY has rebounded firmly from the upward-sloping trendline plotted from March 06 low at 135.37. The asset has extended its recovery above the critical resistance of 136.45, which has turned into support for the US Dollar bulls.

The recovery move in the USD/JPY looks full of strength as the asset has scaled above the 20-and 50-period Exponential Moving Averages (EMAs) at 136.40 and 136.55 respectively.

Meanwhile, the Relative Strength Index (RSI) (14) is making efforts in shifting into the bullish range of 60.00-80.00. An occurrence of the same will trigger the upside momentum.

Going forward, a break above the intraday high at 137.00 will drive the asset toward March 08 high at 137.90 followed by November 28 high at 139.43.

Alternatively, a downside move below the intraday low at 135.82 will drag the asset toward March 01 low at 135.26. A slippage below the latter will expose the asset to February 24 low at 134.06.

USD/JPY hourly chart