USD/JPY Price Forecast: Surges above 149.00 sponsored by elevates US yields

• USD/JPY breaks key resistance, trading at 149.31, as high US yields and dovish PM comments support the pair.
• The Relative Strength Index (RSI) suggests room for further upside, with the August 15 high of 149.39 and 150.00 as the next targets.
• Key support lies at 147.35, with sellers aiming to push the pair below the Ichimoku Cloud at 146.40-60 and the Tenkan-Sen at 145.50.

The USD/JPY rallied and pushed above 149.00 for the first time since mid-August, sponsored by the jump in US Treasury yields due to their close positive correlation with the pair. This and dovish comments from incoming PM Ishiba sponsored a leg-up in the pair, which trades at 149.31.

USD/JPY Price Forecast: Technical outlook

The USD/JPY is neutral to upward biased after clearing key resistance levels like the 50-day moving average (DMA) and entering the Ichimoku Cloud (Kumo).

Momentum hints that buyers remain in charge via the Relative Strength Index (RSI). It should be said that the RSI is still far from being overbought, an indication that the pair could extend its gains.

If USD/JPY extends its gains above the August 15 high of 149.39, the 150.00 figure will be exposed. On further strength, the pair could challenge the 200-DMA at 151.39.

On the other hand, sellers will need to drive the USD/JPY below the latest cycle low according to the daily chart, being the October 8 low of 147.35. Once surpassed, the pair could challenge the bottom of the Kumo at 146.40-60, ahead of the Tenkan-Sen at 145.50.

USD/JPY Price Action – Daily Chart