Hovers around 147.70 with the bullish sentiment

• USD/JPY could improve towards the psychological resistance at the 148.00 level.
• Technical indicators suggest a bullish momentum to revisit January’s high at 148.80.
• A break below the 147.00 level could lead the pair to reach the 14-day EMA and 23.6% Fibonacci retracement level.

USD/JPY grapples to inch higher for the second consecutive session, trading near the 147.70 level during the European hours on Friday. The USD/JPY receives upward support as the Tokyo Consumer Price Index (CPI) in Japan’s national capital decelerated below the Bank of Japan’s (BoJ) 2.0% target for the first time in nearly two years.

The technical analysis of the Moving Average Convergence Divergence (MACD) for the USD/JPY pair suggests a confirmation of a prevailing bullish sentiment in the market with the MACD line positioning above the centreline and showing a divergence above the signal line.

The USD/JPY pair could find a barrier at the psychological level at 148.00. A firm breakthrough above the psychological resistance level could support the pair to approach the major level at 148.50 followed by the weekly high at 148.69 and January’s high at 148.80.

The lagging indicator 14-day Relative Strength Index (RSI) residing above the 50 level indicates bullish momentum, which can support the USD/JPY pair to navigate the resistance area around the psychological level at 149.00.

On the downside, the immediate support could be at the major level at 147.50 following the psychological level at 147.00. A collapse below the psychological support level could push the USD/JPY pair to test support zone around the 14-day Exponential Moving Average (EMA) at 146.90 and 23.6% Fibonacci retracement level at 146.78.

USD/JPY: Daily Chart