On Friday, the USD/JPY currency pair pulled back from the session highs of about 159.86 to trade at about 159.50. The currency pair also completed a downward breakout from an ascending channel formation in the 60-minute chart.

The pair continues to trade slightly above the 100-hour moving average line despite the latest pullback. Friday’s pullback prevented the currency pair from ascending into 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 both markets. On Friday, Japan’s National CPI ex-fresh food for March improved to 1.8%, up from 1.6% in February, as expected. Earlier in the week, exports for March outperformed the expected change of 11%, with a change of 11.7% (YoY), while imports beat the forecasted (YoY) change of 7.1%, with a change of 10.9%. 

In the US, the initial jobless claims for last week missed the expectation of 212k, with a tally of 214k, up from the previous week’s equivalent of 208k. The preliminary S&P Global Manufacturing PMI for April came in better than expected, with 54, versus a forecast of 52.5, up from the previous month’s equivalent of 52.3. On the other hand, the S&P Global Services PMI for the period beat the estimate of 50, with a reading of 51.3, up from 49.8 in March. 

Earlier in the week, US retail sales for March outperformed the expected (MoM) change of 1.4%, with a change of 1.7%. The retail sales control group also beat 0.2%, with a change of 0.7%, while the retail sales ex-autos outshone the estimate of 1.4%, with a change of 1.9% (MoM).

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

Technically, the USD/JPY currency pair has completed a downward breakout from an ascending channel formation in the 60-minute chart. The 14-hour RSI also pulled back to avoid rallying into overbought conditions.

Therefore, the bears will look to stretch the latest pullback towards 159.11 or lower to 158.67. On the other hand, the bulls will look to pounce on rebounds at about 159.86 or higher at 160.27.

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 entering overbought conditions.

Therefore, the bears will look to extend the current pullback towards 157.12 or lower to 154.62. On the other hand, the bulls will look to pounce on profits at about 161.64 or higher at 163.97.