The USD/JPY currency pair on Friday extended the current weekly losses to trade at around 107.910 after experiencing session declines of 1.5%. The currency pair has now plunged by nearly 3.5% in the last two days, in the process shedding nearly 390 pips.

The pair is now trading in oversold levels of the 60-min RSI, which indicates increased bearish bias in the market sentiment. This could trigger the next rebound.

USD/JPY Fundamentals Overview

From a fundamental perspective, the volatility of the USD/JPY currency pair appears to be driven by the spread of the deadly coronavirus. Markest across the world have suffered from government lockdowns with some businesses ultimately coming to a standstill. This could continue to influence the performance of the pair in the coming weeks. However, the latest round of economic data also appears to be playing a part in putting the greenback under pressure.

The US preliminary Manufacturing PMI is one of the few positives to pick from this week’s figures. It beat the expectation for March with 49.2 versus 42.8. On the other hand, the services PMI came short of 42 with 31.9 while the PMI composite edged lower to 40.5 down from 49.6. The initial jobless claims of 3.283M were higher than the expected figure of 1M.

In Japan, the preliminary Jibun Bank Manufacturing PMI for March missed the expectation of 47.6 with 44.8. On the other hand, the Coincidence Index and the Leading Economic Index for January outperformed  94.7 and 90.3, respectively with 95.2 and 90.5. Tokyo CPI for March missed the (YoY) expectation of 0.5% with 0.4%

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

Technically, the USD/JPY currency pair appears to have recently run out of steam after rallying to top 111.590 last week. Since then the trend appears to have hit strong resistance, which resulted in the latest pullback. The pair has now crossed over to oversold levels of the 60-min RSI.

The bears will look to extend declines towards the 50% Fib level at 106.414 or lower at the 61.80% fib level at 105.165. On the other hand, the bulls will target the 23.60% Fib level at 109.204 or higher at 110.112.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair appears to have recently made a sharp recovery off a huge plunge. However, that recovery now looks to have been cut short following the recent pullback.

The bulls will be targeting the next rebound at around 112.283 or higher at 114.117. On the other hand, the bears will look to pounce at around 105.762 or lower at 103.565.