On Friday, the USD/JPY currency pair pulled back from the current weekly high of about 148.76 to trade at about 147.31. The currency pair also completed a downward breakout from an ascending channel formation in the 60-minute chart.

The pair has now plummeted to trade below the 100-hour moving average line. As a result, the currency pair is on the verge of entering 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 Thursday, the Philadelphia Fed Manufacturing Survey for August missed the expectation of 7 with a reading of -0.3.  The initial jobless claims for the week ending August 15 also fell short of the forecasted claim count of 225k, with a tally of 235k, up from the previous week’s equivalent of 224k.

The preliminary S&P Global Manufacturing PMI for August came in stronger than expected, with 53.3 versus a forecast of 49.5, while the preliminary S&P Global Services PMI for the period beat 54.2, with a reading of 55.4. 

In Japan, the National Consumer Price Index for July fell to 3.1% (YoY), down from 3.3% in June. The National CPI ex-food and energy was unchanged at 3.4% (YoY), while the National CPI ex-fresh food edged lower to 3.1%, down from 3.3%, beating the forecasted rate of 3% (YoY).

Earlier in the week, Japanese exports for July missed the forecasted (YoY) change of -2.1% with a change of -2.6%, while imports beat -10.4% with a change of -7.5%(YoY).

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 has also plummeted to move closer to oversold conditions.

Therefore, the bears will look to extend the current pullback towards 146.63 or lower to 145.97. On the other hand, the bulls will look to pounce on rebounds at about 148.08 or higher at 148.76.

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 rallying into overbought conditions.

Therefore, the bears will look to stretch the current pullback towards 145.41 or lower to 143.52. On the other hand, the bulls will look to pounce on profits at about 149.25 or higher at 151.21.