USD/JPY Bounces Off Weekly Lows to Surge Above 107.770 After Data

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The USD/JPY currency pair on Friday bounced off the current 10-day lows of about 107.087 to surge towards 107.770 after the latest round of economic data from both markets. The Japanese Yen had shown some strength on Thursday but the greenback fought back on Friday to recoup losses. 

The currency pair is now back trading within the slightly ascending wedge after momentarily drifting iff downwards. It has now surged closer to overbought levels of the 14-hour RSI in the 60-min chart. It also enjoys strong moving average support at around 107.770.

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 Thursday, the Japanese Jobs/Applicants ratio for April missed the expected ratio of 1.33 with 1.32. The ratio stood at 1.39 in March. However, the unemployment rate of 2.6% was better than the expected rate of 2.7%. 

On the other hand, retail trade for April edged lower 13.7%. This compares adversely to a forecast of -11.5% and a previous reading of -4.7%.  Large retailer sales also disappointed with -22.1% versus -3.7% while the preliminary industrial production change for April missed the (MoM) expectation of -5.1% with -9.1%. The (YoY) figure disappointed with -14.4% versus -7.9%. Tokyo CPI ex-fresh food matched the (YoY) expectation for May with 0.2%.

In the US, initial jobless claims of 2.123M were higher than the expected claims of 2.1M. Annualized GDP for Q1 also disappointed with a 5% decline compared to an expected squeeze of 4.8%. On the other hand, non-defense capital goods orders ex-aircraft for April beat the expectation of -10% with 5.8%.

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

Technically, the USD/JPY currency pair appears to be trading within a slightly ascending wedge in the 60-min chart. This indicates a short-term bullish bias in the market sentiment. The formation comes off a consolidative bearish wedge that completed with a bullish breakout.

The bulls will look to extend the current gains towards 108.514 or higher at 109.318. On the other hand, the bears will target pullback profits at around 107.087 or lower at 106.053.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair continues to trade within a consolidative sideways wedge that is characterized by cyclical swings. The pair is now on the way up after bouncing off trendline support.

The bulls will look to extend the current rebound towards 110.317 or higher at 112.139. On the other hand, the bears will target long-term profits at around 104.781 or lower at 102.503.

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