On Friday, the USD/JPY currency pair pulled back from Thursday’s highs of about 157.83 to trade at about 157.34. In the 60-minute chart, the currency pair trades within an ascending channel formation.

The currency pair has since fallen to trade at the 100-hour moving average line. However, the pair continues to move towards 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 the U.S. market. On Thursday, the U.S. construction spending for November failed to match the forecasted (MoM) change of 0.3% with a change of 0%. The S&P Global Manufacturing PMI for December came in stronger than expected with 49.4 versus a forecast of 48.3.

On the other hand, the initial jobless claims for the week ending December 27 fell to 211k, down from 222k in the preceding week, beating the forecasted claim count of 220k. The continuing claims for the week ending December 20 also outshone the forecast of 1.89 million with a tally of 1.844 million, down from 1.896 million.

Earlier in the week, the U.S. housing price index for October missed the expected (MoM) 0.5% with a change of 0.4%. The S&P/Case-Shiller Home Price Indices for the period beat 4.1% with a (YoY) change of 4.2%. In Japan, the Jibun Bank Manufacturing PMI for December exceeded expectations of 49.5 with a reading of 49.6.

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 still has room left to run before reaching the overbought conditions.

Therefore, the bulls will be looking to stretch the current rally towards 158.03 or higher to 158.70. On the other hand, the bears will look to pounce on pullbacks at about 156.57 or lower at 155.95.

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 is on the verge of entering overbought conditions.

Therefore, the bulls will look to ride the current rally towards 161.43 or higher to 165.54. On the other hand, bears will look to pounce on profits at about 153.23 or lower at 148.86.