USD/JPY Price Analysis: Gains momentum above 135.00 on dovish BoJ minutes
- USD/JPY is upward biased, with price action trading above weekly EMAs.
- Bullish-engulfing candle pattern suggests further upside is expected.
- A break above the 136.00 figure exposes last week’s swing high at 137.77.
The USD/JPY accelerated above the 135.00 figure after the pair bounced off its daily low of 134.64, on fundamental news turning the market sour and a dovish stance by the Bank of Japan (BoJ), according to the March minutes. At the time of writing, the USD/JPY is trading at 135.15, gaining 0.28%.
USD/JPY Price Action
From the weekly chart perspective, the USD/JPY is upward biased, with price action trading above its weekly EMAs. Although last week’s candlestick was bearish, downside risks lie below the 50-WMA at 132.90, followed by 129.65. Hence, if USD/JPY stays above the previously-mentioned support levels, its path of least resistance is upwards. Additionally, the Relative Strength Index (RSI) indicator just crossed the 50-neutral line to bullish territory, suggesting buyers are gathering momentum.
The USD/JPY, daily chart timeframe portrays the major trading sideways, as the EMAs remain flat. Nevertheless, the price action of May 4 and 5th formed a two-candlestick chart pattern known as a bullish-engulfing candle pattern, suggesting that further upside is expected.
If USD/JPY stays above 135.00, the first resistance would be the 136.00 figure. The break above will expose the May 3 daily high of 136.62, followed by the last week’s swing high at 137.77. Conversely, if USD/JPY drops below 135.00, that could open the door to testing the 100-day EMA at 134.20 before testing the confluence of the 50 and 200 EMA at 133.69/80.
USD/JPY Daily Chart
Author
Christian Borjon Valencia
FXStreet
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
