On Thursday, the USD/JPY currency pair pulled back from the session highs of about 158.37 to trade at about 157.82. The currency pair trades within an ascending channel formation on the 60-minute chart.

The pair has now fallen to trade a few levels below the 100-hour moving average line. However, the currency pair still has some room left to run before reaching 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 both markets. In Japan, labor cash earnings for August outperformed the forecast (YoY) change of 3.7%, with a change of 3.7%. 

The non-seasonally adjusted current account balance for the month also came in better than expected, at 4,062 billion yen versus a forecast of 3,194.6 billion yen, up from the previous month’s equivalent of 2,988 billion yen. 

In the US, the initial jobless claims for last week came in lower than expected, at 197k versus a forecast of 200k, down from the preceding week’s revised figure of 199k. Earlier in the week, the US ISM Services PMI for September fell short of the forecast reading of 55, with a reading of 54.9, down from the previous month’s equivalent of 55.4. 

On the other hand, the ISM Services Prices Paid for the period rose to 74, up from 72.6. The ISM Services Employment Index also improved to 50.1, up from 47.8, while the ISM Services New Orders Index edged lower to 59.8, down from 60.9 in August. Elsewhere, the S&P Global Composite PMI for the month remained unchanged at 58.4, in line with forecasts.

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

Technically, the USD/JPY currency pair trades within an ascending channel formation on the 60-minute chart. However, the 14-hour RSI has recently pulled back to move closer to oversold conditions.

Therefore, the bears will look to stretch the latest pullback towards 157.28 or lower, down to 156.65. On the other hand, the bulls will look to pounce on rebounds at about 158.37 or higher, up to 158.96.

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 recover from oversold conditions.

Therefore, the bulls will look to stretch the current rebound towards 160.32 or higher, up to 163.92. On the other hand, the bears will look to extend the current declines toward 155.29 or lower, down to 152.07.