FxWirePro: USD/JPY extends gains ahead of FOMC minutes, hawkish Fed speak buoys USD

Chart - Courtesy Trading View 

USD/JPY was trading 0.22% higher on the day at 123.85 at around 05:05 GMT, outlook is bullish.

The US dollar was boosted as investors digested the possibility of aggressive monetary tightening by the U.S. Federal Reserve to fight inflation.

U.S. Treasury yields hit multi-year highs after Fed Governor Lael Brainard said overnight that she expected a combination of interest rate rises and a rapid balance sheet runoff to take U.S. monetary policy to a "more neutral position" later this year.

Focus now on the release of FOMC minutes for clues on the prospect of a 50 basis point hike at the U.S. central bank's next meeting in May.

Technical bias for the pair is bullish. Scope for test of fresh multi-year high above 125 handle. 

Major Support Levels: 

S1: 123

S2: 122.88 (5-DMA)

Major Resistance Levels: 

R1: 124

R2: 125.31 (Upper BB)

Summary: USD/JPY is likely to extend its bullish streak to test fresh multi-year highs. Bullish invalidation only below 21-EMA.