On Friday, the USD/JPY currency pair pulled back from the session highs of about 147.46 to trade at about 146.99 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. However, the currency pair still has room left to run before reaching 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. In Japan, the Tokyo consumer price index for August fell to 2.6%, down from 2.9% in July. The Tokyo CPI ex-food and energy also edged slightly lower to 3%, down from 3.1%, while the Tokyo CPI ex-fresh food fell to 2.5%, from 2.9%, in line with expectations.

The unemployment rate for July edged lower to 2.3%, down from 2.5% in June, beating the forecast of 2.5%, while the retail trade for the month missed the expected (YoY) change of 1.8% with a change of 0.3%.

In the U.S., personal consumption expenditures – price index for July matched the (MoM) and (YoY) forecasts of 0.2% and 2.6%, respectively. The personal consumption expenditures – price index for the period was also in line with the estimate of 0.3% (MoM) and 2.9% (YoY).

On the other hand, the Chicago Purchasing Managers’ Index for the period missed the expectation of 46 with a reading of 41.5. The Michigan Consumer Sentiment Index for August fell short of the forecasted reading of 58.6, with a reading of 58.2, while the Expectations Index fell short of 57.2 with a reading of 55.9.

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. However, the 14-hour RSI still has room left to run before reaching oversold conditions.

Therefore, the bears will look to stretch the current pullback towards 146.53 or lower to 146.03. On the other hand, the bulls will look to pounce on profits at about 147.46 or higher at 147.93.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair trades within an ascending channel formation. However, the 14-day RSI has recently pulled back to avoid rallying into overbought conditions.

Therefore, the bears will look to extend the current downward movement towards 145.04 or lower to 143.13. On the other hand, the bulls will look to pounce on rebounds at about 148.78 or higher at 150.69.