On Friday, the USD/JPY currency pair bounced from the key support at 142.75 before pulling back to trim session gains to 144.03. The currency pair trades within an ascending channel formation in the 60-minute chart.

Friday’s late pullback pushed the currency pair back below the 100-hour moving average line. As a result, the currency pair avoided rallying into the overbought levels of the 14-hour RSI.

USD/JPY Fundamentals Overview

From a fundamental perspective, the USD/JPY currency pair trades during a relatively busy period in both markets. On Friday, the preliminary Michigan Consumer Sentiment Index for June rose to 60.5, up from 52.2, beating the forecast of 53.5. The Expectations Index for the period also improved to 50.8 from 47.9. On the other hand, the preliminary UoM 1-year and 5-year consumer inflation expectations fell to 5.1% and 4.1%, respectively, down from 6.6% and 4.2%.

Earlier in the week, the U.S. initial jobless claims for last week came in higher than expected with 248k versus a forecast of 240k, unchanged from the previous week. The producer price index for May missed the expectation of 0.2% with a change of 0.1% (MoM), while the (YoY) equivalent was in line with 2.6%.

In Japan, the gross domestic product for Q1 improved to 0% (QoQ), up from -0.2% in the previous period, beating the forecast of -0.2%. The annualised gross domestic product for the quarter also improved to -0.2% from -0.7%, while the gross domestic product deflator for the period was unchanged at 3.3% (YoY), beating the forecast of 3.2%.

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 143.38 or lower to 142.75. On the other hand, the bulls will look to ride the current run of gains toward 144.66 or higher to 145.25.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair trades within a consolidative triangle formation. The 14-day RSI also supports a potential breakout on either the bullish or bearish side of the indicator. 

Therefore, the bulls will target potential upward breakouts at about 146.42 or higher at 148.67. On the other hand, the bears will target downward movements at about 142.04 or lower at 139.73.