USD/JPY Price Analysis: Rally inspired by continuation of BoJ’s ultra-dovish policy approaches 135.00

The USD/JPY pair has scaled quickly to near the crucial resistance of 135.00 after the Bank of Japan (BoJ) announced a continuation of ultra-loose monetary policy and stability in Japanese Government Bonds’ (JGBs) yields band to maintain an expansionary policy stance. BoJ Governor Kazuo Ueda has confirmed that the central bank will take additional easing steps without hesitation as needed while striving for market stability.

S&P500 futures have recovered the majority of losses generated in the Asian session, portraying a recovery in appeal for US equities as investors are cheerful from solid quarterly performances by technology companies.

The US Dollar Index (DXY) has refreshed its day high at 101.76 amid a delay in US debt-ceiling proposal and pre-Federal Reserve (Fed) policy anxiety among the market participants.

On a four-hour scale, USD/JPY is near the edge of the horizontal resistance of the Ascending Triangle chart pattern plotted from March 15 high at 135.12. The upward-sloping trendline of the aforementioned chart pattern is placed from March 24 low at 129.64.

The 20-period Exponential Moving Average (EMA) below 134.00 has got highly diverged from the major, indicating solid strength in the upside bias.

Meanwhile, the Relative Strength Index (RSI) (14) has climbed above 60.00, which signals that the bullish momentum has been triggered.

Going forward, a decisive break above March 06 low at 135.37 will drive the major toward March 10 high at 137.00 followed by the ultimate resistance plotted from March 08 high at 137.91.

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 four-hour chart