USD/JPY Price Analysis: Makes way for 137.00 as BoJ Ueda reiterates favor for easy policy

• BoJ Ueda sees the current monetary policy as appropriate to achieve the 2% inflation target confidently.
• USD/JPY has delivered a breakout of the Inverted H&S pattern that conveys a bullish reversal.
• An oscillating in the bullish range of 60.00-80.00 by the RSI (14) indicates more upside ahead.

The USD/JPY pair is struggling to extend recovery above the immediate resistance of 136.40 in the early European session. The asset has turned sideways as investors are awaiting the release of the United States Durable Goods Orders data for fresh cues. The US Dollar Index (DXY) has faced barricades around 104.90 but is expected to continue its upside to near the 105.00 resistance as investors’ risk appetite has faded dramatically.

Meanwhile, dovish commentary from Bank of Japan (BoJ) Governor Nominee Kazuo Ueda is impacting the Japanese Yen. BoJ Ueda sees the current monetary policy as appropriate to achieve the 2% inflation target confidently.

USD/JPY has delivered a breakout of the Inverted Head and Shoulder chart pattern on a four-hour scale that conveys a bullish reversal after a prolonged consolidation. The impulse of the asset has turned bullish after a confident break above the horizontal resistance plotted from December 28 high at 134.50.

The US Dollar bulls are getting strength from the 50-period Exponential Moving Average (EMA) at 134.60.

An oscillating in the bullish range of 60.00-80.00 by the Relative Strength Index (RSI) (14) indicates a continuation of the upside.

Should the asset break above the intraday high at 136.56, US Dollar bulls will drive the asset toward December 12 high at 137.48 followed by the horizontal resistance placed from December 15 high at 138.18.

Alternatively, a confident break below February 16 low at 133.60 will negate the Inverted H&S formation and will drag the asset toward February 6 high around 133.00 and February 10 high at 131.65.

USD/JPY four-hour chart