On Friday, the USD/JPY currency pair extended Thursday’s pullback to 145.28, further trimming this week’s gains. The currency pair trades within an ascending channel formation in the 60-minute chart.

The pair continues ot trade slightly above the 100-hour moving average line, despite the pullback. As a result, the currency pair remains central in the 14-hour RSI, leaving room for both the bulls and bears to strike.

USD/JPY Fundamentals Overview

From a fundamental perspective, the USD/JPY currency pair trades during a relatively busy period in both markets. On Thursday, Japan’s National Consumer Price Index ex-fresh food for May rose to 3.7% (YoY), up from 3.5% in April, beating the forecast of 3.6%.

Earlier in the week, Japanese exports for the month also outshone the (YoY) forecast of -3.8% with a change of -1.7%, while imports for the period missed the estimate of -6.7% with a change of -7.7% (YoY). Elsewhere, the Bank of Japan chose to keep the base interest rate unchanged at 0.5% in line with expectations.

In the U.S., the Federal Reserve also voted to keep the base interest rate unchanged at 4.5% as predicted. However, building permits for May missed the expected (MoM) change of 1.43 million with a change of 1.393 million, down from 1.422 million in April. The housing starts for the period also fell to 1.256 million, down from 1.392 million, missing the forecast of 1.36 million.

Earlier in the week, the U.S. retail sales for May fell short of the forecasted change of -0.7%, with a change of -0.9%, while the retail sales ex-autos missed 0.1%, with a change of -0.3%.

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

Technically, the USD/JPY currency pair trades within an ascending channel formation in the 60-minute chart. However, the 14-hour RSI has recently pulled back to avoid rallying into overbought conditions.

Therefore, the bears will look to stretch the current pullback towards 144.79 or lower to 144.34. On the other hand, the bulls will look to pounce on rebounds at about 145.72 or higher at 146.13.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair trades within an ascending channel formation. However, the 14-day RSI still has room left to run before reaching overbought conditions.

Therefore, the bulls will look to ride the current run of gains towards 146.88 or higher to 148.51. On the other hand, the bears will look to pounce on pullbacks at about 143.62 or lower at 141.93.