On Friday, the USD/JPY currency pair pulled back from the session highs of about 161.87 to trade at about 161.42. The currency pair trades within a descending channel formation on the 60-minute chart. 

The pair continues to trade a few levels below the 100-hour moving average line after the pullback. As a result, the currency pair is on the verge of re-entering 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, the producer price index for June outperformed the (MoM) and (YoY) forecasts of 0.3% and 6.8%, respectively, with 0.4% and 7.1%. 

Machine tools orders for the month also beat the expected (YoY) change of 37.4%, with a change of 52.8%, while bank lending for the period fell short of the forecasted (YoY) change of 5.8%, with a change of 5.7%. The Eco Watchers Survey for the current situation in June also missed the expectation of 44.6, with a reading of 44, up from the preceding month’s equivalent of 43.6.

In the US, the initial jobless claims for last week came in better than expected, at 215k versus a forecast of 218k, down from the previous week’s equivalent of 217k. On the other hand, the continuing claims for the preceding four weeks rose to 1.814 million, up from 1.806 million. 

Elsewhere, the existing home sales for June fell to 4.09 million, down from 4.19 million, missing the forecasted tally of 4.2 million. Wholesale inventories for May outshone the forecast of 0.3%, with a change of 0.1%, while the consumer credit change for the month missed the expectation of $17.1 million, with a change of $-0.18 million, down from $20.73 million in April. 

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

Technically, the USD/JPY currency pair trades within a slightly descending channel formation on the 60-minute chart. The 14-hour RSI has also pulled back to move closer to oversold conditions.

Therefore, the bears will look to stretch the latest pullback towards 160.91 or lower to 160.43. On the other hand, the bulls will look to pounce on rebounds at about 161.87 or higher at 162.35.

USD/JPY Technical Analysis (the Daily Chart)

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

Therefore, the bears will look to extend the current pullback towards 160.01 or lower to 158.38. On the other hand, the bulls will look to pounce on profits at about 162.86 or higher at 164.33.