The USD/JPY currency pair on Thursday bounced off 4-week lows of about 106.991 after finding support around the 107.00 key level. The currency pair has plunged this week off last week’s highs of about 109.844 amid increased bearish pressure. 

Thursday’s rebound appeared to push the pair off oversold levels of the 14-hour RSI in the 60-min chart. However, the pair remains several pips below the current levels of the 100-hour and the 200-hour SMA lines.

USD/JPY Fundamentals Overview

From a fundamental perspective, the USD/JPY currency pair is trading at the back of a relatively busy period in the US market. On Wednesday, the US Consumer Price Index for May missed the (MoM) expectation of 0.0% with -0.1%. The (YoY) equivalent also came short of expectations of 0.2% with 0.1%. On the other hand, the CPI ex-food and energy missed the (MoM) and (YoY) expectations of 0.0% and 1.3% with -0.1% and 1.2%, respectively. The US Federal Reserve also chose to keep the base interest rate unchanged at 0.25% amid increased market uncertainty.

Earlier in the week, Japan’s annualized gross Domestic Product for Q1 missed the expectation of -2.1% with -2.2%. The (QoQ) GDP also came short of -0.5% with -0.6%. On the other hand, Bank lending activity for May outperformed the (YoY) expectations with 4.8% change versus 3.2% while the current account balance for April came short of estimates.

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

Technically, the USD/JPY currency pair appears to be trading in a sharply diving sequence in the 60-min chart. This indicates a short-term bearish bias in the market sentiment. However, the pair also appears to have found strong support around the 107.000 level, which triggered Thursday’s rebound. 

The bulls will be looking to pounce on short-term rebound profits at around 107.489 or higher at 107.890. On the other hand, the bears will look to extend the current declines towards 106.503 or lower at 105.993.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair appears to have recently pulled back off 10-week highs of about 109.844 to trade at 106.979. This is in line with the currency pair’s volatile movement that dates back to 2018. This prevented it from venturing to overbought levels of the 14-day RSI.

The bears will be looking to extend the current declines towards 105.602 or lower at 104.027. On the other hand, the bulls will target long-term rebound profits at around 108.472 or higher at 110.019.