On Friday, the USD/JPY currency pair pulled back from the session highs of about 150.86 to trade at about 148.00 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 currency pair has now plummeted to trade slightly below the 100-hour moving average line. As a result, the pair has entered 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 BoJ voted to keep the base interest rate unchanged at 0.5%, in line with expectations. Retail trade for June came in better than expected with 2% (YoY) versus the forecasted change of 1.8%. On the other hand, the unemployment rate for June matched the forecasted rate of 2.5%, unchanged from the previous month.

In the U.S., the employment change for July missed the expectation of 110k with a change of 73k, up from the previous month’s equivalent of 14k. The unemployment rate for the period was in line with the estimate of 4.2%, up from 4.1% in June. On the other hand, the average hourly wage growth for July matched the (MoM) forecast of 0.3%. The (YoY) equivalent beat the forecast of 3.8% with a change of 3.9%.

Elsewhere, the ISM Services PMI for July came in lower than expected with 48 versus a forecast of 49.5. The ISM Prices Paid also missed the forecast of 70 with a reading of 64.8. On the other hand, the Michigan Consumer Sentiment Index for July fell short of 62, with a reading of 61.7, while the UoM 5-year consumer inflation expectation for the month fell short of 3.6% with a change of 3.4%.

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 has also plummeted into oversold conditions.

Therefore, the bears will look to pounce on extended pullbacks at about 146.48 or lower at 145.07. On the other hand, the bulls will look to pounce on rebounds at about 149.48 or higher at 150.86.

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 entering overbought conditions.

Therefore, the bears will look to stretch the current pullback towards 143.74 or lower to 139.64. On the other hand, the bulls will look to pounce on profits at about 152.19 or higher at 156.44.