USDJPY Rises After Bank of Japan Governor Strikes Dovish Tone
The USDJPY rises sharply after the Bank of Japan's (BOJ) new Governor, Kazuo Ueda, strikes a dovish tone during his first monetary policy decision. This has given the green light to USD buyers against the Japanese yen. As a result, the USD/JPY has extended its gains by over 1.73%, currently trading at 136.27.
USD/JPY Price Action
Following the release of US inflation data, the USD/JPY has skyrocketed past last week's high of 135.13, extending its gains towards a six-week high of 136.56. This marks a significant rise in the USD/JPY price action.
Uptrend Resumes After US Inflation Data Release
The USD/JPY has resumed its uptrend after the US inflation data release, jumping more than 200 pips in the day. This has opened the door to test the YTD high at 137.91, although buyers must reclaim some resistance levels before challenging the YTD high.
Resistance Levels and YTD High
The USD/JPY's first resistance level is the March 10 high at 136.99. Once this level is cleared, the USD/JPY will continue towards the March 9 high at 137.35, and then the YTD high before testing 138.00.
Outlook and Support Levels
The aggressive rally has lifted the Relative Strength Index (RSI) indicator close to the overbought level, while the Rate of Change (RoC) hit levels last seen on February 15. Given this backdrop, the USD/JPY might be headed for a pullback after Friday's rally. The USD/JPY's first support level would be 136.00, followed by the 135.50 area. If the USD/JPY breaches the latter, it could dip towards the April 19 daily high, turned support at 135.13, ahead of challenging the 135.00 figure.
Forex and USD/JPY Price Analysis
The USD/JPY price analysis highlights the significant role of forex in the global market. The forex market allows traders to buy and sell currencies, including the USD/JPY. The rise in the USD/JPY's price can be attributed to various factors, such as the release of US inflation data and the dovish tone of the Bank of Japan's new Governor. Traders in the forex market can use technical indicators such as the Relative Strength Index (RSI) and the Rate of Change (RoC) to predict future price movements and make informed trading decisions.