USD/JPY Bounces Off 20-Week Lows To Top 105.850 After Japanese Data

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The USD/JPY currency pair on Friday bounced off the current 20-week low of about 103.985 to trade at about 105.850 after the latest Japanese data. The currency pair is now on the way up after recouping more than 50% of the value lost during the week. 

The pair is now pegged between the 50% and the 61.80% Fib levels in the 60-min chart. It has already crossed to overbought levels of the 14-hour RSI. It is pinned just above the 200-hour SMA while the 100-hour SMA is several pips below.

USD/JPY Fundamentals Overview

From a fundamental perspective, the USD/JPY currency pair is trading ta the back of a relatively busy period in both the US and the Japanese markets. Earlier in the week, Japan’s leading economic index for May missed the expectation of 79.3 with 78.4. The coincidence index also came short of 74.6 with 73.4 while the corporate service price index for June beat the (YoY) expectation of 0.5% with 0.8%. 

Retail sales for June outperformed expectations on all fronts while the large retailers’ sales for June beat -12.3% with -3.5%. Jobs/applicants’ ratio of 1.11 was lower than the expected ratio of 1.16 while the unemployment rate improved to 2.8% down from 2.9% beating the forecast of 3.1%. Preliminary industrial production also smashed expectations.

In the US, personal income for June declined by 1.1% versus an expected (MoM) decline of 0.5%. On the other hand, personal spending ticked up 5.6% compared to an expected rise of 5.5%. Core personal expenditure price index for June beat on the (MoM) basis but missed on the (YoY).

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

Technically, the USD/JPY currency pair appears to be trading in a sharply rising curve in the 60-min chart. This indicates a strong short-term bullish bias in the market sentiment. The pair has already crossed to overbought levels of the 14-hour RSI.

The bulls will be looking to extend this run towards 61.80% and 76.40% Fib levels at 106.050 and 106.493, respectively. On the other hand, the bears will target short-term pullback profits at around 50% and 38.20% Fib levels at 105.679 and 105.332, respectively.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair appears to be trading within a descending channel. This indicates a long-term bearish bias in the market sentiment. Today’s rebound pushed the pair off oversold levels of the 14-day RSI back to the normal trading zone.

The bulls will be looking to build on this rebound bu targeting profits at around 106.951, 107.974, and 109.231. On the other hand, the bears will look to pounce at around 104.966 and 103.984.

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