On Friday, the USD/JPY currency pair pulled back from the current week’s high of about 149.97 to trade at about 149.49. The currency pair also completed a downward breakout from an ascending channel formation in the 60-minute chart.

However, the pair continues to trade several levels above the 100-hour moving average line, despite the pullback. Friday’s pullback helped the currency pair recover from 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. In Japan, the Tokyo consumer price index for September remained unchanged at 2.5%. On the other hand, the Tokyo consumer price index ex-food and energy edged lower to 2.5%, down from 3% in the previous update. The Tokyo consumer price index ex-fresh food was unchanged at 2.5%, missing the forecast of 2.8%. 

In the U.S., the Michigan Consumer Sentiment Index for September missed the expectation of 55.4 with a reading of 55.1. The Michigan Consumer Expectations Index for the period also fell short of 51.8, with a reading of 51.7. On the other hand, the UoM 5-year consumer inflation expectation for the month missed the forecast of 3.9% with a change of 3.7%, while the UoM 1-year consumer inflation expectation missed 4.8% with a change of 4.7%. 

Elsewhere, the U.S. personal consumption expenditures – price index for August matched the (MoM) and (YoY) expectations of 0.3% and 2.7%, respectively. The core personal consumption expenditures – price index for the period was also in line with the estimates of 0.2% (MoM) and 2.9% (YoY).

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 also pulled back to recover from overbought conditions.

Therefore, the bears will look to extend the current pullback towards 149.00 or lower to 148.54. On the other hand, the bulls will look to pounce on profits at about 149.97 or higher at 150.40.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair trades within an ascending channel formation. The 14-day RSI also supports a long-term bullish bias as it edges closer to overbought conditions. 

Therefore, the bulls will look to stretch the current run of gains toward 152.23 or higher to 154.71. On the other hand, the bears will look to pounce on pullbacks at about 146.71 or lower at 144.20.