The USD/JPY maintains a bullish bias, though daily technical indicators present a mixed picture. Market attention is primarily focused on forthcoming US inflation data

The USD/JPY pair is attempting to break above a near-term narrow range and sustain its gains after Tuesday’s marginal close above the pivotal Fibonacci barrier at 157.01, which represents the 61.8% retracement of the 160.19 to 151.85 pullback. Last week, the pair repeatedly failed to breach this level.

The daily chart shows mixed technical signals. The Tenkan-sen has crossed above the Kijun-sen, indicating a potential bullish trend. However, positive momentum is fading, and the stochastic oscillator is about to exit the overbought zone after forming a bearish divergence.

Traders are seeking stronger directional signals. A speech from a Bank of Japan (BOJ) official earlier today suggested that the central bank would consider adjusting interest rates if inflation moves towards the 2% target. However, the lack of specific timing details for the next rate move is a slightly negative factor for the yen.

On the other hand, the upcoming release of the US Personal Consumption Expenditures (PCE) report, the Federal Reserve’s preferred inflation gauge, is expected to provide fresh insights into US inflation and influence the Fed’s monetary policy plans. Forecasts suggest that core PCE will remain unchanged in April, which would support the Fed’s hawkish stance and potentially strengthen the dollar.

Sustaining above the 157.01 pivot would enhance prospects for gains towards 158.22 (the 76.4% Fibonacci retracement) and reveal key resistance levels at 160.00/160.19 (psychological level and April 29 multi-year high).

Support is provided by the rising 10-day moving average (DMA) at 156.51, followed by the 20-DMA at 155.71.

Resistance Levels: 157.40; 157.98; 158.43; 159.00
Support Levels: 156.51; 156.00; 155.71; 155.04