The USD/JPY currency pair on Friday pulled back off the trendline resistance at about 134.049 to trade at about 133.198. The currency pair continues to trade within a descending channel formation in the 60-min chart.

The pair has now fallen to trade several levels below the 100-hour moving average line. However, it still seems to have room left before falling back to oversold conditions following Friday’s spike.

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. In the US, the core personal consumption expenditures price index for June beat the (MoM) and (YoY) expectations of 0.5% and 4.7%, respectively with 0.6% and 4.8%. Personal income and personal spending also outshone 0.5% and 0.9%, respectively with 0.6% and 1.1%. On the other hand, the Michigan Consumer Sentiment Index for July outperformed the expectation of 51.1 with 51.5, while the Chicago Purchasing Managers Index fell short of 55 with 52.1.

In Japan, the Jobs Applicants Ratio for June came in at 1.27 versus the forecast of 1.25, while the Tokyo Consumer Price Index for July outshone 0% with a (YoY) change of 2.5%. On the other hand, the unemployment rate for June remained unchanged at 2.6%, slightly ahead of the expectation of 2.5%, while the preliminary industrial production for June surged by 8.9% (MoM), beating the forecasted growth rate of 3.7%. Elsewhere, the retail sales data for June missed on all counts.

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

Technically, the USD/JPY currency pair seems to be trading within a descending channel formation in the 60-min chart. This indicates a significant short-term bearish bias in the market sentiment.

Therefore, the bears will be looking to extend the current decline toward 132.585 or lower to 131.829. On the other hand, the bulls will be targeting short-term profits at about 134.049, or higher at 134.732.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair seems to have recently pulled back to complete a downward breakout from an ascending channel formation. This indicates an attempt by the bears to take control of the pair.

Therefore, they will be targeting extended pullback profits at about 129.946 or lower at 126.731. On the other hand, the bulls will target long-term profits at about 136.583, or higher at 139.383.