USD/JPY Price Forecast: Bulls are testing key 145.35, aiming for higher levels

• The Dollar remains bid on risk-off markets, with downside attempts limited.
• A hawkish Powell, coupled with dovish comments by BoJ's Ueda, are underpinning the USD.
• USD/JPY: Above 145.35, the next targets are 14615 and 147.25.

The US Dollar is faring better than the Japanese Yen in the current risk-averse scenario, with geopolitical concerns driving markets, which keeps the USD/JPY trending higher, with bulls testing resistance at the 145.35 level.

Investors' fears of an escalation of the Middle East conflict have been boosted by Trump's ambiguous comments on Wednesday and a Bloomberg report suggesting that US Senior officials would be preparing for a strike on Iran, which would probably take place during the weekend.

Beyond that, the Federal Reserve kept interest rates and the dot plot unchanged after Wednesday's meeting, but Chairman Powell curbed hopes of further monetary easing, warning about a higher inflation increase as the effect of tariffs filters in.

In Japan, the BoJ also kept rates unchanged earlier this week, but cast doubt on further monetary tightening over the coming months in some dovish tweak to its recent rhetoric, which added pressure on the Yen

Technical analysis: Above 145.35, the next targets are 146.15 and the 147.00 area

The USD/JPY is on a bullish trend, with downside attempts finding buyers. From a longer-term perspective, the pair seems to have found a significant bottom at 142.15. The higher low printed last week suggests that a deeper recovery is on the cards.

The pair is now testing a key resistance area at 145.35 with harmonic pattern studies suggesting that we might be in the C-D leg of a Butterfly formation heading to levels past the mentioned June 11 high, at 145.35, aiming for the May 29 high, at 146.15 and the 78.6% Fibonacci retracement of the late May sell-off, at 147.25.

On the downside, support is at the Jun 18 low, at 144.45 intra-day ahead of the 16 June low, at 143.65. A break of 142.80 cancels this view.

USD/JPY 4-Hour Chart