USD/JPY Price Analysis: Faces barricades at Rising Channel, upside looks likely on prudent BOJ

• A decisive breach of the 20- and 50-EMAs adds to the upside filters.
• The RSI (14) is attempting to violate 60.00, which will fetch a fresh leg of the rally.
• A breach of 135.60 will expose the asset to printing a fresh two-decade high.

The USD/JPY pair is showing exhaustion signals after failing to sustain above the crucial resistance of 134.00. Earlier, the asset displayed a swift upside move from a low of 131.50 recorded on Thursday. The greenback bulls have attracted offers despite the continuation of an ultra-loose monetary policy by the Bank of Japan (BOJ).

On an hourly scale, a responsive buying action by the greenback bulls to near the Rising Channel chart formation has met with significant offers. The upper portion of the above-mentioned chart pattern is placed from June 8 high at 134.48 while the lower portion is plotted from June 9 low at 133.19.

The asset has crossed the 20- and 50-period Exponential Moving Averages (EMAs) at 133.22 and 133.55 respectively. It is worth noting that the asset’s price is auctioning above the short-term EMAs while the 20-EMA is trading lower than the 50-EMA. This indicates that the buying action in the asset is very much firmer.

Meanwhile, the Relative Strength Index (RSI) (14) is attempting to cross the 60.00 mark to confirm a fresh leg of a rally. An occurrence of the same will expose the asset to more upside.

Should the asset oversteps Friday’s high at 134.65, the greenback bulls will negate the Rising Channel’s breakdown, which will empower them to recapture a two-decade high at 135.60. A breach of the latter will expose the asset to record a fresh two-decade high to near 5 October 1998 high at 136.06.

Alternatively, the yen bulls could regain strength if the asset drops below Friday’s low at 132.18. This will drag the asset towards Thursday’s low at 131.50, followed by June 6 low at 130.43.

USD/JPY hourly chart