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USD/JPY Rallies as BoJ Continues Ultra-Dovish Policy Approaches

The USD/JPY pair has experienced a rapid increase, approaching the crucial resistance of 135.00. This surge has been triggered by the Bank of Japan’s (BoJ) announcement of the continuation of ultra-dovish monetary policy, maintaining the expansionary policy stance by keeping Japanese Government Bonds’ (JGBs) yields band stable. BoJ Governor Kazuo Ueda has confirmed that the central bank will not hesitate to take additional easing steps as needed while also striving for market stability.

Additionally, the USD Index has jumped above 101.76 due to the delay in the US debt-ceiling proposal and pre-Federal Reserve (Fed) policy anxiety among investors. The recovery in appeal for US equities, led by strong quarterly performances by technology companies, has contributed to the recovery of the majority of losses generated in the Asian session, as portrayed by S&P500 futures.

The USD/JPY pair is on the verge of delivering a breakout of the Ascending Triangle pattern, with the horizontal resistance near the 135.00 mark. The 20-period Exponential Moving Average (EMA) below 134.00 has become highly diverged from the major, indicating solid strength in the upside bias. Meanwhile, the Relative Strength Index (RSI) (14) has climbed above 60.00, signaling that the bullish momentum has been triggered.

A decisive break above March 06 low at 135.37 will drive the pair towards the March 10 high at 137.00, followed by the ultimate resistance plotted from March 08 high at 137.91. However, a break below April 05 low at 130.63 would drag the asset towards the round-level support of 130.00, with further downside exposing the asset to March 24 low at 129.64.

Currency Pair: USD/JPY
Current Trend: ↗️Bullish
Trade Signal: ↗️Buy
👉 Entry Price: Above 135.37
✅ Take Profit: 137.00, 137.91
❌ Stop Loss: Below 134.00

Overall, this is a BUY signal for the USD/JPY currency pair, with the continuation of ultra-dovish monetary policy by the Bank of Japan and the recovery of the US equities market. However, investors should closely monitor the breakout of the Ascending Triangle pattern and the support levels mentioned above to adjust their positions accordingly.