The USD/JPY currency pair on Friday pulled back off the session highs of about 161.35 to trade at about 160.85. The currency pair continues to trade within a descending channel formation in the 60-minute chart.

The pair has now descended to trade a few levels below the 100-hour moving average line. As a result, the currency pair appears to be moving towards 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 the US market. On Friday, the US jobs data for June outperformed the expectation of 190k with a tally of 206k, down from the previous month’s equivalent of 218k.

On the other hand, the unemployment rate for the month missed the forecast of 4% with a rate of 4.1%, up from 4% in May. The average hourly earnings growth for the period came in line with the estimated (MoM) and (YoY) growth rates of 0.3% and 3.9%, respectively, down from 0.4% and 4.1% in the preceding month.

Earlier in the week, the US ISM services PMI for June missed the expectation of 52.5 with a reading of 48.8. The ISM Manufacturing PMI for the period also fell short of 49.1 with a reading of 48.5, while the S&P Global Composite PMI outshone the forecast of 54.6 with a reading of 54.8.

Elsewhere, the ADP employment change for June failed to match the expected change of 160k with a change of 150k jobs, while the initial jobless claims for the week ending June 28 missed 235k with a slightly higher claim count of 238k.

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

Technically, the USD/JPY currency pair appears to be trading within a descending channel formation in the 60-minute chart. The 14-hour RSI has recently pulled back to avoid rallying into overbought conditions.

Therefore, the bears will be targeting extended pullbacks at about 160.29 or lower at 159.73. On the other hand, the bulls will be targeting profits at about 161.35 or higher at 161.90.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair continues to trade 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 declines at about 159.22 or lower at 157.43. On the other hand, the bulls will look to ride the current rally towards 162.41 or higher to 164.12.