The USD/JPY currency pair on Friday traded sideways after breaking out of an ascending channel formation. The currency pair momentarily spiked to breach the 126.500 level before pulling back slightly to 126.353. 

The pair remains several levels above the 100-hour moving average line in the 60-min chart. Friday’s slight pullback also prevented the currency pair from extending gains towards 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. While Friday was significantly quiet amid the Passover holiday, the US market was quite busy on Thursday. The retail sales control group for March came short of estimates with a change of -0.1% compared to a more bullish estimate of 0.2%. General retail sales also missed the mark with 0.5% versus 0.6% (MoM) while the retail sales ex-autos outshone the lower estimate of 1% with a higher figure of 1.1%.

Earlier in the week, the producer price index data was generally impressive, beating expectations on all counts. However, the CPI data ex-food and energy had disappointed the previous day. The initial jobless claims for last week also came in a little heavier than expected with 185k versus 171k, while import and export price indexes beat on both (YoY) and (MoM) basis.

In Japan, Bank lending for March beat 0.3% with 0.5% (MoM. On the other hand, the PPI missed the (MoM) estimate but beat on a (YoY) basis.

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

Technically, the USD/JPY currency pair appears to have recently pulled back to complete a channel breakout before assuming a sideways trend formation. This indicates a decaying bullish sentiment in the market.

Therefore, the bears will be targeting short-term profits at about 125.954, or lower at 125.508. On the other hand, the bulls will be looking to resume the upward trend by targeting profits at about 126.704, or higher at 127.008.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair seems to be trading within a sharply ascending channel formation. This indicates a strong long-term bullish bias in the market sentiment.

Therefore, the bulls will be targeting long-term profits at about 127.948, or higher at 129.962. On the other hand, the bears will target potential pullback profits at about 124.093, or lower at 121.561.