On Friday, the USD/JPY pulled back from the session highs of about 158.85 to trade at about 157.23 after the latest US data. The USD/JPY also completed a downward breakout from an ascending channel formation on the 60-minute chart.

The pair has since plummeted to trade below the 100-hour moving average line. As a result, the currency pair fell into 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 the US market. On Friday, US durable goods orders for August outperformed the expected change of -0.4%, with a change of 0%. On the other hand, the durable goods orders ex-transportation for the period fell short of the forecast change of 0.6%, with a change of 0.3%, while the nondefense capital goods orders ex-aircraft outshone the estimate of 0.5%, with a change of 1.6%.

Elsewhere, the Michigan Consumer Sentiment Index for September improved to 48.1, up from 47.8 in August, beating the forecast of 47.6. On the other hand, the UoM 1-year consumer inflation expectation for the month matched the forecast of 4.6%. The UoM 5-year consumer inflation expectation was also in line with the estimate of 3.4%.

On Thursday, the US initial jobless claims for last week fell slightly to 197k, down from the previous week’s equivalent of 198k, beating the forecast claim count of 201k. Earlier in the week, the preliminary S&P Global Manufacturing PMI for September outshone the forecast of 53.5, with a reading of 57. The preliminary S&P Global Services PMI for the period also beat 56, with a reading of 58.7.

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

Technically, the USD/JPY currency pair has recently completed a downward breakout from an ascending channel formation on the 60-minute chart. The 14-hour RSI has also fallen into oversold conditions.

Therefore, the bears will look to extend the current pullback towards 156.39 or lower, to 155.51. On the other hand, the bulls will look to pounce on rebounds at about 158.01 or higher, up to 158.85. 

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair trades within a descending channel formation. However, the 14-day RSI has recently bounced back to avoid falling into oversold conditions.

Therefore, the bulls will look to stretch the current rebound towards 160.48 or higher, up to 163.89. On the other hand, the bears will look to pounce on pullbacks at about 154.05 or lower, down to 150.37.