The USD/JPY currency pair on Friday pulled back off the session highs of about 145.98 to trade at about 144.40. The currency pair appears to have completed a downward breakout from an ascending channel formation.
The pair continues to trade a few levels above the 100-hour moving average line in the 60-minute chart. Friday’s pullback prevented the currency pair from advancing into the overbought 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 nonfarm payrolls for December outperformed the expected job count of 170k with a tally of 216k. The unemployment rate for the period remained unchanged from November at 3.7%, beating the forecasted rate of 3.8%.
On the other hand, the average hourly wage for the month outshone the forecasted (MoM) and (YoY) growth rates of 0.3% and 3.9%, respectively with changes of 0.4% and 4.1%, while factory orders for November beat the estimated (MoM) change of 2.1% with a change of 2.6%. Elsewhere, the ISM Services PMI for December missed the expectation of 52.6 with a reading of 50.6.
In Japan, the consumer confidence index for December improved to 37.2 up from the previous month’s equivalent of 36.1. The Jibun Bank Services PMI for December fell to 51.5 down from 52 in the previous month, while the Monetary Base for the month missed the expected (YoY) change of 9% with a change of 7.8%.
USD/JPY Technical Analysis (the 60-min Chart)
Technically, the USD/JPY currency pair appears to have recently completed a downward breakout from an ascending channel formation. The 14-hour RSI also seems to support a short-term bearish bias after pulling back to avoid rallying to overbought conditions.
Therefore, the bears will be targeting extended pullbacks at about 143.79 or lower at 142.98. On the other hand, the bulls will look to pounce on rebounds at about 145.10 or higher at 145.98.
USD/JPY Technical Analysis (the Daily Chart)
In the daily chart, the USD/JPY currency pair appears to have recently completed an upward breakout from a descending channel formation. The 14-day RSI also seems to support a long-term bullish bias after bouncing back to avoid falling into oversold conditions.
Therefore, the bulls will be targeting extended rebounds at about 148.11 or higher at 151.60. On the other hand, the bears will look to pounce on profits at about 140.92 or lower at 137.11.