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Rising US yields are continuing to pressure the Japanese currency. This morning BoJ Kuroda's dovish comment has left the yen powerless, with USDJPY now above the 125 level, and nearly at the highest level since 2002. Technical analysis shows no other major resistance until the 134 level. How far can the pair go now?    

The dollar is firing higher as markets are starting to price in an increasing probability of a 50 basis points rate rise in the May meeting. Federal Reserve Bank of St. Louis President James Bullard lately said he favors raising rates sharply to curb the highest inflation in four decades, openly suggesting he'd back a 50 bps hike in May. Other Fed officials like Charles Evans and Raphael Bostic also voiced support for an increase. Naturally, higher rates favor the USD, and that is why right now the greenback is enjoying strong momentum, leaving the upside risk intact so far.

The US dollar is rallying following hawkish comments from Federal Reserve Governor Lael Brainard. Yields on both the short and the long-end of the curve are rising, with the 2-year yields now above 2.5%, adding appeal to the US dollar. The euro and the yen are both weakening, and USDJPY is now attempting to break above 125.

The rally in USDJPY saw a pause after hitting the 2015 Kuroda line. But with expectations of further hikes from the Fed and Bank of Japan's unlimited bond-buying commitment, don't be surprised to see the rally resume in the coming days. Looking at the price action, technicals are displaying an attractive setup. The bulls have managed to break above the recent descending channel and the 121.3 support level appears to be holding. The question is: will dollar bulls have another try to test the 125 resistance level? 
 

Reports that Russia will reduce military operations near Kyiv lifted sentiment in Europe and sent the pair EURUSD nearly 1.3% higher. WTI dropped below the 100 level and precious metals extended losses.