The USD/JPY currency pair on Friday pulled back from the session highs of about 159.33 to trade at about 157.87. The currency pair appears to be trading within a sideways channel formation in the 60-minute chart.

The pair continues to trade a few levels below the 100-hour moving average line. Friday’s late pullback pushed the currency pair closer to the oversold levels of the 14-hour RSI.

USD/JPY Fundamentals Overview

From a fundamental perspective, the USD/JPY currency pair is trading at the back of a relatively busy period in both markets. On Friday, the preliminary Michigan Consumer sentiment index for July missed the expected reading of 68.5 with a reading of 66, down from 68.2. The preliminary UoM 5-year inflation expectations for the period also edged lower to 2.9% down from 3%.

Elsewhere, the producer price index for June missed the (MoM) expectation of 0.2% with a change of 0.1%. The (YoY) outcome also exceeded the forecast of 2.3% with a change of 2.6%. The producer price index ex-food and energy beat the expected (MoM) and (YoY) forecasts of 0.2% and 2.5%, respectively with changes of 0.4% and 3%.

In Japan, industrial production for May exceeded the (MoM) forecast of 2.8% with a change of 3.6% up from 2.8%. The (YoY) equivalent also delivered a better change of 1.1% versus 0.3% in the preceding period. Earlier in the week, machinery orders for May beat the expected (YoY) change of 7.2% with a change of 10.8%.

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

Technically, the USD/JPY currency pair is trading within a sideways channel formation in the 60-minute chart. However, the 14-hour RSI has recently pulled back to move closer to oversold conditions.

Therefore, the bears will be targeting extended pullbacks at about 156.96 or lower at 156.14. On the other hand, the bulls will look to pounce on rebounds at about 158.55 or higher at 159.33.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair is trading within an ascending channel formation. However, the 14-day RSI has recently pulled back to recover from overbought conditions.

Therefore, the bears will be targeting extended pullback profits at about 154.50 or lower at 150.82. On the other hand, the bulls will look to pounce on profits at about 161.90 or higher at 165.35.