The USD/JPY currency pair on Friday morning pulled back off the session highs of about 149.00 to trade at about 148.20. The currency pair trades within a descending channel formation in the 60-minute chart.

The pair continues to trade a few levels above the 100-hour moving average line. Friday’s pullback pushed the currency pair closer to the oversold levels of the 14-hour RSI.

USD/JPY Fundamentals Overview

From a fundamental perspective, the USD/JPY currency pair trades during a relatively busy period in the US market. On Thursday, the US retail sales for July outperformed the expected (MoM) change of 0.3% with a change of 1%. The retail sales ex-autos also outshone the forecast of 0.1% with a change of 0.4%.

Elsewhere, the NY Empire State Manufacturing Index for August exceeded the expectation of -6 with a reading of -4.7, while the Philadelphia Fed Manufacturing Survey for the period missed the forecast of 7 with a reading of -7. The US initial jobless claims for the week ending August 9 came in better than expected with 227k versus a forecast of 235k.

Earlier in the week, the US consumer price index for July edged slightly lower to 2.9% (YoY) down from 3% in June, missing the forecast of 3%. The (MoM) equivalent was in line with the estimate of 0.2%, down from 0.3% in the preceding month.

In Japan, the preliminary gross domestic product for Q2 grew by 0.8%, ahead of the forecasted growth rate of 0.5%. The preliminary annualised gross domestic product for the quarter also exceeded the expectation of 2.1% with a change of 3.1%, the preliminary GDP deflator beat the (YoY) forecast of 2.6% with a change of 3%.

USD/JPY Technical Analysis (the 60-min Chart)

Technically, the USD/JPY currency pair trades within a descending channel formation in the 60-minute chart. The 14-hour RSI has also pulled back to move closer to oversold conditions.

Therefore, the bears will target extended declines at about 147.67 or lower to 147.10. On the other hand, the bulls will look to pounce on potential rebounds at about 148.78 or higher at 149.35.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair trades within a sharply ascending channel formation. The 14-day RSI also bounced back to recover from oversold conditions. 

Therefore, the bulls will be looking to extend the current rebounds toward 149.96 or higher to 151.62. On the other hand, the bears will look to pounce on profits at about 146.41 or lower at 144.67.