The USD/JPY currency pair on Friday pulled back off the session highs of about 134.330 to trade at about 134.105. The currency pair appears to be forming a descending channel in the 60-min chart.

The currency pair has now dropped to trade a few levels below the 100-hour moving average line. This prevented the currency pair from ascending into overbought levels 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. On Friday, Japan’s preliminary Jibun Bank Manufacturing PMI for April beat the expected reading of 48.9 with a reading of 49.5. On Thursday, the National Consumer Price Index for March outshone the expected (YoY) change of 2.6% with a change of 3.2%. On the other hand, the CPI ex-food and energy beat the forecasted change of 3.4% with a change of 3.8% (YoY), while the CPI ex-fresh food was in line with the estimate of 3.1%.

In the US, the preliminary S&P Global Manufacturing PMI for April outperformed the expected reading of 49 with a reading of 50.4. The S&P Global composite PMI also beat the forecast of 52.8 with a reading of 53.5, while the Services PMI outshone 51.5 with a reading of 53.7. Earlier in the week, the initial jobless claims for the week ending April 14 missed the forecasted claim count of 240k with a higher tally of 245k, while the Philadelphia Fed Manufacturing PMI for March missed -19.2 with a reading of -31.3.

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

Technically, the USD/JPY currency pair appears to be trading within a descending channel formation in the 60-min chart. This indicates a significant short-term bearish bias in the market sentiment.

Therefore, the bulls will be looking to pounce on potential rebounds at about 134.340 or higher at 134.572. On the other hand, the bears will be targeting extended declines at about 133.855 or lower at 133.613.

USD/JPY Technical Analysis (the Daily Chart)

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

Therefore, the bulls will be looking to ride the current rally towards 135.120 or higher to 136.113. On the other hand, the bears will look to pounce on pullbacks at about 132.756 or lower at 131.728.