USD/JPY Price Analysis: Marches firmly above 135.00, after dovish US FOMC minutes

• USD/JPY is advancing some 0.03% as the Asian session begins on cooler-than-estimated FOMC minutes.
• The USD/JPY retraced towards the 50% Fibonacci retracement, before
• The major might extend its uptrend once buyers reclaim 135.50.

The USD/JPY grinds high as Wall Street closes, though retraced from weekly highs reached just above the 50-day EMA, at around 135.49, but FOMC’s minutes tumbled the pair towards the 135.00 figure before the NY close. At the time of writing, the USD/JPY is trading at 135.06.

US equities were lower on Wednesday, portraying risk aversion. The greenback weakened but held to gains against its counterpart’s safe-haven peers, and per the US Dollar Index, recorded modest gains of 0.16%, at 106.645.

Also read: FOMC minutes: Rate would have to reach a ‘sufficiently restrictive’ level to control inflation

USD/JPY Price Analysis: Technical outlook

The USD/JPY remains upward biased, despite retracing from daily highs. The break above the confluence of a downslope-trendline and the 20-day EMA opened the door for additional gains, further reinforced by the Relative Strength Index (RSI) just crossing above 50, a bullish signal. A decisive break above the 50-day EMA at 135.38 would open the door for further upside, being the first target, the July 27 daily high at 137.46.

In the shorter time-frame, as I wrote in yesterday’s article, “ … the major might print a leg down before resuming the higher-time frame uptrend towards 135.00 and beyond.” On Wednesday, the USD/JPY printed a leg down, towards the 200-hour EMA, just above the 50% Fibonacci retracement around 133.90, and resumed the uptrend. However, it faced sold resistance at 135.49 and consequently fell towards the 135.00 figure, ahead of Thursday’s Asian session open.

However, the USD/JPY is neutral-to-upward biased, and the first resistance will be the August 17 high at 135.49. Break above will expose 136.00, followed by the July daily high at 136.57.

USD/JPY Hourly chart

Also read: USD/JPY Price Analysis: Soars and reclaims 134.00, eyeing 135.00

USD/JPY Key Technical Levels