The USD/JPY currency pair pulled back on Friday after finding strong resistance around the 111.500 level. The pair has been on a downward movement since the middle of last month albeit with notable rebounds.

Friday’s pullback drove the USD/JPY to a new 3-week low as the greenback continued to weaken against major pairs.

USD/JPY Fundamentals Overview

From a fundamental perspective, the pair is trading off a US Fed statement that surprised no one and a strong Jobs data where more than 360k new jobs were created in April beating 183k expected.

However, wage growth missed expectations while the PMI data was also weak. This resulted in the greenback retreating against some of the major currencies.

Going forward, traders will be waiting for Fed’s Harker Speech on Monday. Japan will have no major activity in the next three days with two holidays coming, Greenery Day (Sat 4) and Children’ Day (Sun 5 to be Observed on Monday 6). As such, the greenback should find some footing on Monday.

USD/JPY Technical Analysis (the 240-min Chart)

The USD/JPY currency pair maintains a bearish outlook from a technical perspective. The 240-min chart shows that the pair is currently pegged centrally in Andrews pitchfork. This suggests a potential case of short-term consolidation.

As such, the bulls will target profits at around the 111.400 level given the current rate of 111.079. On the other hand, the bears will hope that the pullback continues by targeting profits at 110.853.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair bearish pressure is again confirmed. The pair could be set for a long-term target of about 108.950 as demonstrated using the bottom ascending trendline.

And given the pair’s most recent rally and the subsequent pullback as demonstrated using the arc shape, the greenback lacks enough momentum. As such, traders can use the Fibonacci retracements to identify profit opportunities.

The bulls will target profits midway between 61.80% and 76.40% Fib levels at 111.774. On the other hand, the bears will claim control of the current bearish run by targeting profits at 38.20% Fib level at 109.938.

In summary, the USD/JPY currency pair’s run towards recent highs was cut short by a resilient Japanese Yen. The recent economic numbers did not help the greenback. 111.500 is a key level to watch.