The USD/JPY currency pair on Friday pulled back off the 100-hour moving average line at 129.996 to trade at about 129.762. The currency pair appears to be trading within a consolidative triangle formation in the 60-min chart.

Friday’s late pullback appears to have prevented the currency pair from ascending towards the overbought levels of the 14-hour RSI. The currency pair now remains centrally in the normal trading zone of the strength indicator.

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. On Friday, the US pending home sales for December beat the expected (MoM) change of -0.9% with a change of 2.5%. The Michigan consumer sentiment Index for January also outshone the forecasted reading of 64.6 with a reading of 64.9, while personal spending missed the estimate of -0.1% with a change of -0.2%.

Earlier in the week, the preliminary annualised Q4 GDP beat the expectation of 2.6% with a change of 2.9%, while durable goods orders topped the estimate of 2.5% with a change of 5.6%. The initial jobless claims for last week also impressed with a tally of 186k compared to an estimated claim count of 205k.

In Japan, the Tokyo CPI ex-fresh food for January outperformed the expected (YoY) change of 4.2% with a change of 4.3%, while the Tokyo CPI ex-food and energy missed the estimate of 2.8% with a (YoY) change of 1.7%. The general CPI was in line with the forecasted change of 4.4% (YoY).

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

Technically, the USD/JPY currency pair appears to be trading within a consolidative triangle formation in the 60-min chart. This indicates a lack of a clear directional bias in the market sentiment.

Therefore, the bears will be targeting profits at about 129.154 or lower at 128.437. On the other hand, the bulls will look to pounce on profits at about 130.571 or higher at 131.348.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair appears to be trading within a descending channel formation. This indicates a significant long-term bearish bias in the market sentiment.

Therefore, the bears will be looking to stretch the current run of declines toward 126.911 or lower to 123.991. On the other hand, the bulls will look to pounce on rebounds at about 132.332 or higher at 134.835.