The US Dollar comes from a five-week profitable streak against the Japanese Yen, on the back of hawkish minutes from the Fed and relevant rhetoric from officials, which highlighted the stark policy differential between the central banks of the US and Japan.
On Sunday, Cleveland Fed's President Ms Mester who is a voter, pushed the hawkish agenda on a interview with CBS's Face the Nation. She stressed the importance of getting inflation under control, warning that it will remain above 2% this year and even in 2023.
She sounded optimistic though around this task, noting that "I think we can reduce that excess demand relative to supply without pushing the economy into a recession". 
The pair is also sensitive to the bond yield movements, with the US 10 Year Yields rising significantly given the Fed's hawkishness and today they extends their multi-year highs.
Markets are also monitoring the Covid-19 situation in China and mostly in Shanghai, but the Japanese Yen fails to attract risk-off flows. The Chinese mainland reported 1,164 new locally transmitted COVID-19 cases for April 10 and there were also 26,411 new asymptomatic carriers (local and imported). Shanghai had 914 carriers with symptoms (from 1,006 in the previous day) and 25,173 asymptomatic (from 23,937 in the previous day). 
USD/PY starts the week on the offensive and runs its seventh straight profitable, registering fresh nearly seven year highs. It now eyes the 2015 high (125.86), although bulls my need fresh impetus to tackle 126.88.
From a technical prospective, the move is overextended and this could put pressure on the pair, but a catalyst would be needed for a pullback below 124.00.
Today's docket does not feature any major economic release, but markets await the US CPI inflation figures tomorrow.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
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