USD/JPY Price Analysis: Gains momentum above 135.00 on dovish BoJ minutes

• USD/JPY is upward biased, with price action trading above weekly EMAs.
• Bullish-engulfing candle pattern suggests further upside is expected.
• A break above the 136.00 figure exposes last week’s swing high at 137.77.

The USD/JPY accelerated above the 135.00 figure after the pair bounced off its daily low of 134.64, on fundamental news turning the market sour and a dovish stance by the Bank of Japan (BoJ), according to the March minutes. At the time of writing, the USD/JPY is trading at 135.15, gaining 0.28%.

USD/JPY Price Action

From the weekly chart perspective, the USD/JPY is upward biased, with price action trading above its weekly EMAs. Although last week’s candlestick was bearish, downside risks lie below the 50-WMA at 132.90, followed by 129.65. Hence, if USD/JPY stays above the previously-mentioned support levels, its path of least resistance is upwards. Additionally, the Relative Strength Index (RSI) indicator just crossed the 50-neutral line to bullish territory, suggesting buyers are gathering momentum.

The USD/JPY, daily chart timeframe portrays the major trading sideways, as the EMAs remain flat. Nevertheless, the price action of May 4 and 5^th formed a two-candlestick chart pattern known as a bullish-engulfing candle pattern, suggesting that further upside is expected.

If USD/JPY stays above 135.00, the first resistance would be the 136.00 figure. The break above will expose the May 3 daily high of 136.62, followed by the last week’s swing high at 137.77. Conversely, if USD/JPY drops below 135.00, that could open the door to testing the 100-day EMA at 134.20 before testing the confluence of the 50 and 200 EMA at 133.69/80.

USD/JPY Daily Chart