On Friday, the USD/JPY currency pair pulled back from the session highs of about 158.67 to trade at about 158.01 after the latest data. The currency pair trades within a descending channel formation in the 60-minute chart.

The pair has now plummeted 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 the U.S. market. On Friday, the US industrial production for December outperformed the expected (MoM) change of 0.1%, with a change of 0.4%. 

On Thursday, the initial jobless claims for last week fell to 198k, down from the preceding week’s claim count of 207k, and below the forecasted figure of 215k. The NY Empire State Manufacturing Index for January came in stronger than expected, with 7.7, versus a forecast of 1. The Philadelphia Fed Manufacturing Survey for the month also beat the expectation of -2, with a reading of 12.6.

Earlier in the week, U.S. retail sales for November exceeded the (MoM) forecast of 0.4%, with a change of 0.6%. The retail sales ex-autos for the period also outshone the estimate of 0.4%, with a change of 0.5% (MoM). Elsewhere, the producer price index for November matched the expected change of 0.2% (MoM). The (YoY) equivalent exceeded the forecast of 2.7%, with a change of 3%. 

On the other hand, the producer price index ex-food and energy missed the expected (MoM) change of 0.3%, with a change of 0%. The (YoY) equivalent came in stronger than expected, with 3% versus a forecast of 2.7%.

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

Technically, the USD/JPY currency pair trades within a descending channel formation in the 60-minute chart. The 14-hour RSI also supports a bearish bias as it edges closer to oversold conditions.

Therefore, the bears will look to stretch the current decline towards 157.41 or lower to 156.55. On the other hand, the bulls will look to pounce on rebounds at about 158.67 or higher at 159.43.

USD/JPY Technical Analysis (the Daily Chart)

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

Therefore, the bears will look to extend the latest pullback towards 154.38 or lower to 150.49. On the other hand, the bulls will look to pounce on profits at about 161.84 or higher at 165.42.