On Friday, the USD/JPY currency pair pulled back from the session highs of about 148.98 to trade at about 148.34. The currency pair trades within an ascending channel formation in the 60-minute chart. 

The pair continues to trade slightly above the 100-hour moving average line despite the pullback. Friday’s pullback prevented the currency pair from advancing into 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 both markets. On Friday, the preliminary Michigan Consumer Sentiment Index for March missed the expectation of 63.1 with a reading of 57.9, down from the preceding month’s equivalent of 64.7. On the other hand, the preliminary UoM 5-year consumer inflation expectation for the month increased to 3.9%, up from 3.5% in February.

Earlier in the week, the U.S. producer price index for February missed the (MoM) and (YoY) expectations of 0.3% and 3.3%, respectively, with changes of 0% and 3.2%. On the other hand, the producer price index ex-food and energy fell short of 0.3% (MoM) and 3.5% (YoY) with changes of -0.1% and 3.4%, respectively.

In Japan, the gross domestic product for Q4 missed the (QoQ) forecast of 0.7% with a change of 0.6%. On the other hand, the gross domestic product deflator for the quarter outshone the (YoY) forecast of 2.8% with a change of 2.9%, while labour cash earnings for January fell short of the forecasted (YoY) change of 3.2% with a change of 2.8%.

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

Technically, the USD/JPY currency pair trades within an ascending channel formation in the 60-minute chart. However, the 14-hour RSI has recently pulled back to avoid rallying into overbought conditions.

Therefore, the bears will look to extend the current pullback towards 147.68 or lower to 146.95. On the other hand, the bulls will look to pounce on rebounds at about 148.98 or higher at 149.71.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair trades within a descending channel formation. The 14-day RSI also supports a bearish bias as it edges closer to the oversold conditions.

Therefore, the bears will look to ride the current downward movement towards 145.09 or lower to 142.05. On the other hand, the bulls will look to pounce on profits at about 151.54 or higher at 154.51.