On Friday, the USD/JPY currency pair pulled back from the session highs of 156.79 to trade at 155.33 before bouncing back to 156.04. The currency pair trades within a descending channel formation on the 60-minute chart.

The pair continues to trade several levels below the 100-hour moving average line, despite the late rebound. 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 both markets. In Japan, the retail trade for July outperformed the expected (YoY) change of 3%, with a change of 4%. The seasonally adjusted retail trade for the month grew by 2.4% (YoY), while large retailers were up 1.4% (YoY).

In the US, Jobs data for August came in better than expected, at 162k versus a forecast of 56k, up from the previous month’s equivalent of 21k. The unemployment rate for the month was in line with the estimate of 4.1%, unchanged from July. The average hourly wage growth for the period also matched the forecast (MoM) change of 0.3%, while the (YoY) equivalent beat 3%, with a change of 3.1%. 

On Thursday, the US ISM Services PMI for August rose to 55.4, up from 54.1 in July, beating the forecast reading of 54.3. On the other hand, unit labor costs for Q2 missed expectations of 1.3%, with a change of 1.2%, while nonfarm productivity for the quarter was in line with the estimate of 1.4%.

Elsewhere, the S&P Global Composite PMI for August remained unchanged from July at 56, as expected. The initial jobless claims for last week missed the expectation of 205k, with a claim count of 206k, up from the previous week’s equivalent of 204k.

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

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

Therefore, the bears will look to stretch the current pullback towards 155.33 or lower, to 154.59. On the other hand, the bulls will look to pounce on rebounds at about 156.79, or higher at 157.48.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair trades within an ascending channel formation. However, the 14-day RSI has recently pulled back to move closer to oversold conditions.

Therefore, the bears will look to stretch the latest pullback towards 152.20 or lower, to 147.91. On the other hand, the bulls will look to pounce on rebounds at about 160.06 or higher, at 164.06.