The USD/JPY currency pair on Friday found strong resistance at the 100-hour moving average line following Thursday’s rebound. The currency pair had fallen to trade at a new 2-week low of about 140.325 before rallying back to 143.303.
The currency pair continues to trade within a descending channel formation in the 60-min chart. The pair still seems to have room left to run before reaching the overbought 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. Om Thursday, the Bank of Japan chose to keep the base interest rate unchanged at -0.1%, sparking the sharp decline in the currency pair. Earlier in the week, the Japanese National Consumer Price Index for August outperformed the (YoY) expectation of 2.6% with a change of 3%. On the other hand, the National CPI ex-fresh food beat the forecast of 2.7% with a change of 2.8% (YoY), while the National CPI ex-food and energy missed 1.7% with a change of 1.6% (YoY).
In the US, the preliminary S&P Global Manufacturing PMI for September outshone the expectation of 51.1 with 51.8. The S&P Global Composite PMI also beat 44.7 with 49.3, while the Services PMI exceeded the estimate of 45 with 49.2. Earlier in the week, the Federal Reserve raised the base interest rate by 75 basis points to 3.25% up from 2.5%, in line with expectations. The initial and continuing jobless claims outperformed estimates on Thursday.
USD/JPY Technical Analysis (the 60-min Chart)
Technically, the USD/JPY currency pair seems to be trading within an ascending channel formation in the 60-min chart. This indicates a significant short-term bullish bias in the market sentiment.
Therefore, the bulls will be looking to ride the current rally towards 143.713 or higher to 144.280. On the other hand, the bears will look to pounce on pullbacks at about 142.880 or lower at 142.295.
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 bears will be targeting long-term profits at about 141.832 or lower at 140.254. On the other hand, the bulls will look to extend the current gains toward 144.617 or higher to 146.010