On Friday, the USD/JPY currency pair pulled back from the current 2-week highs of about 145.92 to trade at about 144.05. The currency pair also completed a downward breakout from an ascending channel formation in the 60-minute chart.

The pair continues to trade slightly above the 100-hour moving average line, despite the late pullback. Friday’s pullback pushed the currency pair closer to the oversold 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 Thursday, the Bank of Japan kept the base interest rate unchanged at 0.5%, in line with forecasts. The unemployment rate for March increased slightly from 2.4% in February to 2.5%, missing the forecast of 2.4%. Earlier in the week, the retail sales for March also fell short of the forecasted (MoM) change of 3.5% with a change of 3.1%.

In the U.S., the nonfarm payrolls for April fell to 177k, down from 185k in March, beating the forecast of 130k. However, the average hourly wage growth for the period missed the expected (MoM) change of 0.3% with a change of 0.2%. The (YoY) equivalent also fell short of 3.9% with a change of 3.8%, while the unemployment rate was unchanged at 4.2%, in line with expectations.

The factory orders for March also failed to match the expectation of 4.5% with a change of 4.3% (MoM). Earlier in the week, the initial jobless claims for the week ending April 25 increased to 241k, up from 223k in the preceding week, missing the forecasted claim count of 224k. The ADP employment change for April also missed 108k with 62k, down from 147k in March.

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

Technically, the USD/JPY currency pair has completed a downward breakout from an ascending channel formation in the 60-minute chart. The 14-hour RSI also supports a bearish bias as it edges closer to oversold conditions. 

Therefore, the bears will look to extend the current pullback towards 142.88 or lower to 141.94. On the other hand, the bulls will look to pounce on rebounds at about 144.96 or higher at 145.92.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair trades within a descending channel formation. However, the 14-day RSI has recently bounced back to avoid falling into oversold conditions.

Therefore, the bulls will look to extend the current rebound towards 147.72 or higher to 151.42. On the other hand, the bears will look to pounce on profits at about 139.96 or lower at 136.26.