On Friday, the USD/JPY currency pair pulled back from session highs near 157.98 to trade around 156.98. 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, despite the latest pullback. Friday’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 National consumer price index for August remained steady at 1.9% (YoY). The National CPI ex-food and energy for the period was also flat at 1.9% (YoY), the same as the previous period, while the National CPI ex-fresh food edged slightly lower to 1.7%, down from 1.8%, missing the forecasted rate of 1.8% (YoY). 

Earlier in the week, Japanese exports for August outperformed the (YoY) expectation of 18.2%, with a change of 19.3%. Imports for the period also beat the expected (YoY) change of 26.3%, with a change of 28%.

In the US, industrial production for August missed the expected (MoM) change of 0.3%, with a change of 0%. The Federal Reserve raised the base interest rate by 25 basis points to 4%, up from 3.75% as expected. 

On the other hand, the US building permits for August missed expectations of 1.41 million, with 1.394 million, down from the previous month’s equivalent of 1.433 million. Housing starts for the period also fell short of 1.31 million, with a tally of 1.275 million, down from 1.309 million in July.

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 recover from overbought conditions.

Therefore, the bears will look to stretch the current pullback towards 155.98 or lower, to 154.87. On the other hand, the bulls will look to pounce on rebounds at about 157.98 or higher, at 159.03.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair trades within a descending channel formation. However, the 14-day RSI has recently bounced back to avoid falling into oversold conditions.

Therefore, the bulls will look to extend the current rebound towards 160.37 or higher, up to 163.84. On the other hand, the bears will look to pounce on profits at about 153.41 or lower, down to 149.82.