On Friday, the USD/JPY currency pair pulled back from the session highs of about 161.48 to trade at about 161.21. The currency pair trades within an ascending channel formation in the 60-minute chart.

The pair continues to trade several levels above the 100-hour moving average line, despite the latest pullback. Thursday’s pullback helped the currency pair recover from the overbought 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 both markets. In Japan, the Bank of Japan raised the base interest rate by 25 basis points to 1% from 0.75% as expected. 

On the other hand, exports for May came in better than expected with a (YoY) change of 17% versus a forecast of 16.2%, while imports for the month missed the estimated change of 12.8%, with a change of 12.5% (YoY). On Friday, the National CPI ex-fresh food for May matched the forecasted rate of 1.4% (YoY).

In the US, the Federal Reserve chose to keep the base interest rate unchanged at 3.75% as expected. The initial jobless claims for last week came in worse than expected, with 226k versus a forecast of 225k, down from the previous week’s claim count of 230k. On the other hand, the Philadelphia Fed Manufacturing Survey for May rose to 10.3, up from -0.4, beating the forecasted reading of 10. 

Elsewhere, the US retail sales for May outperformed the expected (MoM) change of 0.5%, with a change of 0.9%. The retail sales ex-autos also exceeded the forecast of 0.5%, with a change of 0.8% (MoM).

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

Technically, the USD/JPY currency pair trades within an ascending channel formation in the 60-minute chart. However, the 14-hour RSI has recently pulled back to recover from overbought conditions.

Therefore, the bears will look to extend the latest pullback towards 161.01 or lower to 160.71. On the other hand, the bulls will look to pounce on rebounds at about 161.48 or higher at 161.81.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair trades within an ascending channel formation. The 14-day RSI also supports a long-term bullish bias as it edges closer to overbought conditions.

Therefore, the bulls will look to stretch the current run of gains toward 162.75 or higher to 164.21. On the other hand, the bears will look to pounce on pullbacks at about 159.74 or lower at 158.23.