On Friday, the USD/JPY currency pair bounced back from the session lows of about 159.32 to trade at about 159.65. The currency pair trades within an ascending channel formation on the 60-minute chart.

The pair continues to trade a few levels above the 100-hour moving average line after the rebound. However, the currency pair still has some room left to run before reaching 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. On Friday, the Tokyo consumer price index for August improved to 1.9% (YoY), up from 1.8% in July. The CPI ex-food and energy also rose to 2% (YoY), up from the previous month’s equivalent of 1.8%. 

On the other hand, the CPI ex-fresh food edged slightly higher to 1.8% (YoY), up from 1.7%, beating the forecasted change of 1.7%. Elsewhere, the unemployment rate for July fell to 2.4%, down from 2.5% in June, beating the forecasted rate of 2.5%.

In the US, the Michigan Consumer Expectations Index for August rose to 51.5, up from 50.6, beating the forecasted reading of 50.6. The Michigan Consumer Sentiment Index for the period also outshone the estimate of 51, with a reading of 51.7, up from 51 in July.

Elsewhere, the UoM 1-year consumer inflation expectations for August missed the expected rate of 4.3%, with 4%, down from the previous month’s equivalent of 4.3%. The UoM 5-year consumer inflation expectations for the month came in unchanged at 3.3%, in line with expectations.

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 159.32 or lower to 159.01. On the other hand, the bulls will look to pounce on profits at about 159.91, or higher at 160.24.

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 also supports a long-term bullish bias after bouncing back to recover from oversold conditions.

Therefore, the bulls will look to stretch the latest rebound towards 161.73 or higher to 163.89. On the other hand, the bears will look to pounce on profits at about 157.49, or lower at 155.33.