On Friday, the USD/JPY currency pair pulled back from the session highs of about 146.15 to trade at about 145.01 after the latest U.S. data. The currency pair also completed a downward breakout from an ascending channel formation in the 60-minute chart.

The pair continues to trade a few levels above the 100-hour moving average line. Friday’s pullback helped the currency pair to recover from the overbought conditions 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 the U.S. market. On Thursday, the preliminary U.S. nonfarm productivity for Q1 missed the expected change of -0.4% with a change of -0.8%. The preliminary unit labour costs for the quarter beat the expectation of 5.3% with a change of 5.7%.

On the other hand, the initial jobless claims for the week ending May 2 fell to 228k down from 241k in the preceding week, beating the forecasted claim count of 230k.

Earlier in the week, the U.S. ISM Services PMI for April came in better than expected with 51.6 versus a forecast of 50.6, while the S&P Global Composite PMI for the period fell short of 51.2 with a reading of 50.6. Elsewhere, the Federal Reserve chose to keep the base interest rate unchanged at 4.5% in line with forecasts.

In Japan, the labour cash earnings for March fell short of the expected (YoY) change of 2.3% with a change of 2.1%.

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

Technically, the USD/JPY currency pair had completed a downward breakout from an ascending channel formation. The 14-hour RSI also supports a bearish bias after pulling back to recover from overbought conditions.

Therefore, the bears will target extended pullbacks at about 143.96 or lower at 141.91. On the other hand, the bulls will look to pounce on a rebound at about 146.15 or higher at 147.14.

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 target extended rebounds at about 150.92 or higher at 155.50. On the other hand, the bears will look to ride the current run of declines toward 140.06 or lower to 134.99.