The USD/JPY currency pair on Friday bounced off the trendline support at 129.389, putting a halt to a 2-day sequence of declines. The currency pair continues to trade within a descending channel formation in the 60-min chart.

Friday’s late rebound prevented the current pair from falling towards the 100-hour moving average line. As a result, the pair avoided plummeting into the oversold conditions of the 14-hour RSI.

USD/JPY Fundamentals Overview

From a fundamental perspective, the USD/JPY currency pair is trading at the back of a relatively busy period in both markets. On Friday, the US personal income for March came in stronger than expected with a positive change of 0.5% compared to the projected change of 0.4%. Spending also matched income with another positive return of 1.1% growth from the previous month compared to the market forecast of 0.7%. However, both the Chicago purchasing managers index and the Michigan consumer sentiment index missed expectations of 62 and 65.7, respectively with 58.5 and 65.2.

In Japan, the Bank of Japan chose to keep the base interest rate unchanged at -0.1% on Thursday. Earlier in the week, Large Retailer Sales for March beat the expected change of 0.3% with a change of 1.5%, while retail Trade outshone 0.4% with a change of 0.9% on a (YoY) basis. However, the preliminary industrial production for March failed to match the expected (MoM) change of 0.5% with a lower change of 0.3%.

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

Technically, the USD/JPY currency pair seems to be trading within a sharply descending channel formation in the 60-min chart. This indicates a strong short-term bearish bias in the market sentiment. 

Therefore, the bears will be looking to stretch the current series of declines towards 129.389 or lower to 128.888. On the other hand, the bulls will be targeting channel breakout profits at about 130.368, or higher at 130.917.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair seems to be trading within a sharply ascending channel formation. This indicates a strong long-term bullish bias in the market sentiment.

Therefore, the bulls will be looking to extend the current gains towards 131.305 or higher to 133.306. On the other hand, the bears will look to pounce on potential reversals at about 128.436 or lower at 126.519.