On Friday, the USD/JPY currency pair pulled back from the session highs of about 157.91 to trade at about 156.66. 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 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. On Thursday, the Bank of Japan chose to keep the base interest rate unchanged at 0.25%, in line with expectations. The National Consumer Price Index for November rose from 2.3% to 2.9%. The National CPI ex-fresh food was also up, coming in at 2.7% compared to 2.3% in October, while the National CPI ex-food and energy rose to 2.7%, up from 2.3%, beating the forecasted rate of 2.6%.

Elsewhere, exports for November beat the expected change of 2.8% with a change of 3.8% (YoY), while imports missed 1% with a change of -3.8%(YoY).

In the U.S., the initial jobless claims for the week ending December 13 fell to 220k, down from 242k in the preceding week, beating the forecasted claim count of 230k. The annualised U.S. gross domestic product for Q3 exceeded the expectation of 2.8% with a change of 3.1%, while the gross domestic product price index aligned with the estimate of 1.9%.

On the other hand, the personal consumption expenditure-price index matched the expectation of 1.5%, while the core personal consumption expenditure prices beat 2.1% with a change of 2.2%.

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 pulled back to recover from overbought conditions.

Therefore, the bears will look to stretch the current pullback towards 155.37 or lower to 154.17. On the other hand, the bulls will look to pounce on rebounds at about 157.91 or higher at 159.15.

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 the overbought conditions.

Therefore, the bulls will look to ride the current run of gains toward 161.58 or higher to 165.73. On the other hand, the bears will look to pounce on pullbacks at about 152.28 or lower at 147.80.