USD/JPY Maintains Bullish Trend, Supported by Techn. Indicators

The moderate upward movement in the USD Index has come to a close as investors anticipate that the Federal Reserve (Fed) will raise interest rates only once, despite Fed Chair Jerome Powell confirming two rate hikes by the end of the year. Additionally, the softening of US Treasury yields mirrors the performance of the USD Index, with yields on 10-year US government bonds hovering around 3.79%.

All eyes are now on Fed Chair Powell's testimony, where detailed guidance on maintaining interest rates at their current level in June's monetary policy will be provided. The focus will also be on any further guidance offered and the current state of the banking crisis.

Regarding the Japanese Yen, more than half of the economists surveyed by Reuters believe that if the yen depreciates to the 145 per US dollar level, Japan's government and the Bank of Japan (BoJ) will take action to halt its decline. This intervention could potentially occur through a stealth intervention by the BoJ.

During the Asian session, Japan's Ministry reported mixed Industrial Production data for April. Surprisingly, the monthly economic data expanded by 0.7%, surpassing street expectations of a 0.4% contraction. However, annualized Industrial Production contracted by 0.7%, higher than the anticipated 0.3% contraction. From a technical standpoint, the USD/JPY pair remains in a bullish trend, with the price rebounding from previous support levels and aligning with the dynamic trendline. The pair exhibits a bullish outlook across all timeframes, affirming our long position. RSI Continue to be Bullish without Divergence.

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