The USD/JPY price analysis is slightly bullish as investors balance a stronger dollar and yen amid safe-haven demand. Over the weekend, an escalation in Middle East tensions pushed investors to buy safe-haven assets like the dollar and the yen. However, trading was thin as UK markets closed for a public holiday.Notably, the US dollar has recovered since the previous session as Israel and Hezbollah exchanged missiles. Tensions have remained high since the death of senior leaders in the war. Moreover, the chances of a ceasefire agreement between Israel and Gaza have fallen, raising fears of a more prolonged war that could broaden. The safe-haven inflows to the dollar reversed last week’s decline after Powell’s speech. Notably, the Fed chair opened the door to a rate cut in September, weakening the dollar. Fed policymakers are more confident price pressure will ease to the 2% target. At the same time, they are becoming weary of a weak labor market. Consequently, the likelihood of a rate cut in September has risen.Meanwhile, BoJ Governor Kazuo Ueda maintained a hawkish tone on Friday. The tone difference between the two top policymakers has created a divergence in policy outlooks. Investors expect lower rates in the US and higher rates in Japan. This divergence boosted the yen, raising the prospect of a smaller rate gap between Japan and the US. Investors are now awaiting the US core PCE price index for more clues on the timing and size of future Fed rate cuts. USD/JPY key events today

 USD/JPY technical price analysis: Corrective move meets SMA resistanceUSD/JPY 4-hour chartOn the technical side, the USD/JPY price has risen to retest the 30-SMA resistance after a sharp decline. However, the bearish bias remains intact, and the price will likely respect the SMA as resistance. Notably, the bullish move was weak and shallow, indicating a correction. Therefore, if bears remain in control, the price might bounce lower with an impulsive move to retest the 142.50 support level. Here, bears will meet a solid barrier. A break below will solidify the bearish bias. However, if the support holds firm, USD/JPY will consolidate or bounce higher.More By This Author:USD/CAD Outlook: CAD Strengthens Amid Rising Oil PricesGBP/USD Price Analysis: Refreshes YTD Highs Amid Upbeat PMIsUSD/JPY Outlook: Ueda’s Hawkish Stance Lifts Yen