USD/JPY Price Analysis: Gains momentum above 143.30 mark following BOJ Summary of Opinions

• USD/JPY stands above the 50- and 100-hour EMAs with an upward slope.
• The immediate resistance emerges at 142.60; the key contention is located at 142.00.
• The Relative Strength Index (RSI) stands below 50, MACD holds in bearish territory.

The USD/JPY pair reverses Friday’s pullback and holds ground around 142.22 heading into the early European session on Monday. According to a summary of the opinions of the Bank of Japan (BoJ) released on Monday, one board member said that wages and prices could keep rising at a pace not seen in the past. BoJ policymakers added that it’s necessary to maintain ultra-low interest rates until robust domestic demand and higher wages replace cost-push factors as the primary drivers of price increases and maintain sustainable inflation around its target.

According to the four-hour chart, the USD/JPY pair stands above the 50- and 100-hour Exponential Moving Averages (EMAs) with an upward slope, which means the path of least resistance is to the upside for the time being.

USD/JPY’s immediate resistance emerges at 142.60 (the midline of the Bollinger Band). Further north, the 142.90–143.00 area appears to be a tough nut to crack for USD/JPY. The mentioned level represents the confluence of a psychological round mark and a high of August 4. Any meaningful follow-through buying could pave the way to the next hurdle at 143.60 (the upper boundary of the Bollinger Band) and 143.90 (High of August 3).

On the downside, the key contention for USD/JPY is located at 142.00 (a psychological round mark and 50-hour EMA). The next stop for the pair is seen at 141.55 (100-hour EMA and the lower limit of the Bollinger Band), followed by 141.30 (High of July 27) and 141.00 (a psychological round figure). 

It’s worth noting that the Relative Strength Index (RSI) stands below 50 and the MACD holds in bearish territory, which indicates that the downside momentum has been activated.

USD/JPY four-hour chart