USD/JPY Pulls Back Off Trendline Support to Trim Session Gains

The USD/JPY currency pair on Friday pulled back off the trendline support at about 128.283 to trade at about 127.898. The currency pair continues to trade on an ascending channel formation in the 60-minute chart following Thursday’s late rebound.

However, the currency pair remains several levels below the 100-hour moving average line, leaving room for more upward movement. Friday’s late pullback also prevented the currency pair from advancing into the overbought conditions 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 both the US and the Japanese markets. On Thursday, the US department of labour reported a relatively higher jobless claims tally of 218k compared to the expectation of 299k for the Week ending May 13.

However, the continuing claims for the period ending May 6 came in slightly better than expected with a claim count of 1.317 million versus a market forecast of 1.32 million. Elsewhere, the Philadelphia Fed Manufacturing Survey returned less optimistic data with a reading of 2.6 compared to the expectation of 16.

In Japan, the National Consumer Price Index for April outperformed the expected (YoY) change of 1.5% with a change of 2.5%, while the CPI ex-Fresh Food matched the expectation of 2.1%. On the other hand, the CPI ex-food and energy for the period outshone the forecasted change of -0.9% with a change of 0.8%.

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

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

Therefore, the bulls will be looking to push the current rebound towards 128.283 or higher to 128.695. On the other hand, the bears will be targeting potential pullback profits at about 127.503, or lower at 127.113.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair appears to be pulling back in a short-term descending channel formation after suffering momentum exhaustion. This indicates an attempt by the bears to take control of the pair in the long term.

Therefore, the bears will be targeting long-term profits at about 125.165, or lower at 121.609. On the other hand, the bulls will look to pounce on potential rebounds at about 130.544, or higher at 133.857.

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