On Friday, the USD/JPY currency pair pulled back from the session highs of about 144.27 to trade at about 142.69 after the latest data. The currency pair trades within a descending channel formation in the 60-minute chart.

The pair has now plummeted to trade a few levels below the 100-hour moving average line. As a result, the currency pair is on the verge of entering the overbought 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 preliminary S&P Global Manufacturing PMI for May edged higher to 52.3, up from 50.2 in April, beating the forecast of 50.1.

The preliminary S&P Global Services PMI for the period also improved to 52.3, up from 50.8, beating the expectation of 50.8, while the preliminary S&P Global Composite PMI edged higher to 52.1, up from 50.6. On the other hand, the initial jobless claims for the week ending May 16 came in lower than expected with 227k versus a forecast of 230k, down from the preceding week’s equivalent of 229k.

In Japan, the National Consumer Price Index for April was unchanged at 3.6% (YoY). On the other hand, the National Consumer Price Index ex-food and energy edged slightly higher to 3% (YoY), up from 2.9%, while the National Consumer Price Index ex-fresh food came in at 3.5%, up from 3.2%, beating the forecast of 3.4% (YoY).

Elsewhere, exports delivered a (YoY) change of 2% in line with estimates, down from 4% in the preceding period, while imports beat the forecasted (YoY) change of -4.5% with a change of -2.2%, down from 1.8%.

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

Technically, the USD/JPY currency pair trades within a descending 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 run of declines toward 141.81 or lower to 140.95. On the other hand, the bulls will look to pounce on rebounds at about 143.40 or higher at 144.27.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair has completed a downward breakout from an ascending channel formation. However, the 14-day RSI still has room to run before reaching oversold conditions.

Therefore, the bears will look to extend the current pullback towards 139.87 or lower to 137.28. On the other hand, the bulls will look to pounce on profits at about 145.69 or higher at 148.35.