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USD/JPY extends losses on the chatter surrounding stimulus measures by the Japanese government.
Momentum indicators suggest a favorable trend in the pair’s price movement over the short-term period.
The 147.50 psychological level acts as the immediate resistance, lined up with the weekly high.
USD/JPY extends its losses on the second day, trading around 147.40 below the Year-To-Date (YTD) high during the European session on Thursday. The pair experienced downward pressure after the moderate economic data from the United States (US).
Additionally, Kyodo News citing anonymous sources, the Japanese government is reportedly planning to introduce new economic stimulus measures in October. The primary objectives of these stimulus measures, as mentioned in the news, are to provide support for companies to increase wages and reduce energy costs.
The Moving Average Convergence Divergence (MACD) line stays above the centerline and lies above the signal line. This suggests that the recent momentum is relatively stronger.
The 147.50 psychological level acts as the immediate barrier, followed by the weekly high at 147.87. A break above the latter could support the USD/JPY pair to explore the region around the 148.00 level.
On the downside, the 14-day Exponential Moving Average (EMA) at 146.37 emerges as the key support, following the 21-day EMA at 145.81 aligned to the 23.6% Fibonacci retracement at 145.37 level.
In the short term, the USD/JPY pair remains to be bullish as long as the 14-day Relative Strength Index (RSI) stays above 50.
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