On Friday, the USD/JPY currency pair pulled back from the session highs of about 159.13 to trade at about 158.82. The currency pair trades within an ascending channel formation on the 60-minute chart.

Friday’s pullback prevented the pair from advancing into the overbought levels of the 14-hour RSI. The currency pair also pulled back to trade slightly below the 100-hour moving average line.

USD/JPY Fundamentals Overview

From a fundamental perspective, the USD/JPY currency pair trades during a relatively busy period in both markets. On Friday, Japan’s National Consumer Price Index for July rose to 1.9% (YoY), up from 1.6%. The National CPI ex-food and energy also improved slightly to 1.8% (YoY), up from 1.7% in June, while the National CPI ex-fresh food came in at 1.8% (YoY), up from 1.6%, in line with expectations. 

On Thursday, Japanese exports for July beat the forecast of 19.9%, with a change of 23.2% (YoY), while imports outshone 26.5%, with a change of 27.8% (YoY). Earlier in the week, the country’s preliminary gross domestic product for Q2 missed the (QoQ) forecast of 0.5%, with a change of 0.3%.

In the US, the Philadelphia Fed Manufacturing Survey for August improved to 47.4, up from 41.4 in July, beating the forecasted reading of 25. On the other hand, the initial jobless claims for last week fell to 206k, down from the previous week’s equivalent of 212k, beating the forecasted claim count of 210k.

Earlier in the week, US building permits for July beat the forecast of 1.37 million, with a tally of 1.433 million, up from the previous month’s equivalent of 1.374 million. On the other hand, housing starts fell to 1.239 million, down from 1.415 million, missing the forecasted reading of 1.35 million.

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

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

Therefore, the bears will look to stretch the current pullback towards 157.96 or lower to 157.10. On the other hand, the bulls will look to pounce on profits at about 159.72, or higher at 160.58.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair also trades within an ascending channel formation. The 14-day RSI has also recently bounced back, avoiding oversold conditions.

Therefore, the bulls will look to extend the current rebound towards 161.47 or higher to 164.06. On the other hand, the bears will look to pounce on profits at about 156.16, or lower at 153.45.