USD/JPY Price Analysis: Likely flex muscles above 134.00 as Fed to hike rates further

The USD/JPY pair is juggling in a narrow range around 134.00 in the Asian session. The major is gathering strength to shift its business above the aforementioned resistance as investors are backing US Dollar on expectations of the continuation of the policy-tightening process by the Federal Reserve (Fed).

There is no denying the fact that loosening the United States labor market conditions, softening Consumer Price Index (CPI) and Producer Price Index (PPI) reports, and easing retail demand are conveying that the Fed has to pause its policy-tightening spell sooner. However, the core inflation has turned extremely stubborn and the fight against stick inflation has a lot more to come.

The US Dollar Index (DXY) has sensed selling pressure while extending its upside above the immediate resistance of 101.8, however, the upside bias is still solid.

On a two-hour scale, the asset is hovering near the horizontal resistance of the Ascending Triangle chart pattern plotted from March 16 high at 133.83. Upward-sloping trendline of the aforementioned chart pattern is placed from March 24 low at 129.64.

The major is confidently auctioning above the 20-period Exponential Moving Average (EMA) at 133.38, which indicates that the short-term trend is bullish.

Adding to that, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates that the upside momentum is extremely bullish.

Going forward, a decisive break above the intraday high at 134.10 will drive the major toward March 06 low at 135.37 followed by March 10 high at 137.00.

On the contrary, a break below April 05 low at 130.63 would drag the asset toward the round-level support of 130.00. A break below the 130.00 support would expose the asset to March 24 low at 129.64.

USD/JPY two-hour chart