USD/JPY snaps its two-day losing streak on the weaker US Dollar (USD), trading higher around 146.70 during the European session on Friday. The psychological level at 147.00 appears to be the immediate resistance. A breakthrough above this resistance level could reinforce the pair’s strength to reach the nine-day Exponential Moving Average (EMA) at 147.12. In case the USD/JPY pair surpasses the nine-day EMA, it could attempt to approach the psychological resistance zone around the level of 148.00 followed by the weekly high at 148.33. The technical analysis of the 14-day Relative Strength Index (RSI) for USD/JPY suggests a bullish momentum as it is positioned above the 50 level.
However, the lagging indicator of the Moving Average Convergence Divergence (MACD) signals a shift in market sentiment, with the MACD line positioned above the centerline but displaying a divergence below the signal line. Traders may choose to wait for MACD confirmation for a clearer direction before making aggressive bets on the USD/JPY pair. On the downside, the pair could encounter major support at the 146.50 level, following the psychological support at 146.00. A decisive break below this level could exert downward pressure on the USD/JPY pair, potentially reaching the 38.2% Fibonacci retracement at 145.53, aligned with the major support at 145.50.
