USDJPY Analysis 19.12.2018

The US dollar fell during the US session to see its lowest since October 29 against the Japanese yen following developments and economic data that followed on the Japanese economy and on the eve of developments and economic data expected Wednesday by the US economy, the largest economy in the world in conjunction with the proceedings of the meeting of the Committee Federal Open Market in Washington.

At 05:59 GMT, the USDJPY dropped 0.14% to 112.36 from the opening levels at 112.52 after hitting a seven-week low of 112.19 while the pair reached a high of 112.60. .

On the Japanese economy, the reading of the trade balance showed that the deficit widened to 0.74 trillion yen from 0.45 trillion yen in October, worse than the forecast of a deficit of 0.63 trillion yen. The revised trade balance showed the widening deficit to 0.49 trillion yen 0.29 trillion yen, while expectations for a deficit of 0.31 trillion yen, as the growth of exports slowed more than the slow growth of imports during the last month.

This comes hours after the Japanese government released its forecast of growth and capital spending in addition to inflation for the year 2018 and 2019 next year, which lowered its forecast for growth this year to 0.9% from 1.5% and next year to 1.3% from 1.5%, amid forecasts That capital spending in the current year to 3.6% and next year to 2.7%.

As the Japanese government lowered its forecast for inflationary pressures in the year 2018 to 1.0% from 1.1% and for the next year 2019 to 1.1% from 1.5% in previous forecasts, and we wish to note that Japan's fiscal year is the third largest economy in the world expires by the end of March and begins New fiscal year there with the beginning of April, the Japanese government is expected to use these estimates as they prepare to balance the new fiscal year.

On the other hand, investors are looking to the US economy for the current account reading, which may reflect a widening deficit to $ 125 billion against $ 101 billion in the second quarter before we foretell the release of housing market data with the release of the Existing Home Sales Index Fell 0.4% to 5.20 million from 1.4% at 5.22 million last October.

This comes in the midst of a meeting of the Federal Open Market Committee in Washington, where monetary policy makers are expected to raise federal funds rates by 25bp for the fourth time this year to between 2.25% and 2.50% And go ahead with cuts in government bond and mortgage bond purchases by $ 50 billion per month.

It is also expected that the Federal Committee will reveal after the meeting today its expectations of growth rates, inflation and unemployment in addition to the future interest rates of short-term reference for the next three years, amid the expectation of any hints about the future tightening of monetary policy and the pace of raising interest on federal funds in the coming period in shadow The US administration has been critical of the Fed's hard-line policies and the recent momentum of economic data.

Technical Analysis

The USD / JPY pair broke the 112.46 level below it, opening the way towards the next target at 111.97. The price should be monitored at this level as breaching it will cause an extension of the bearish wave in the short term, To 110.40.

Stochastic is losing its positive momentum to support the continuation of the downside movement during the coming period, which will remain intact unless 112.97 and above 113.56 are breached and stability above it.

The trading range for today is among the key support at 111.50 and resistance at 113.00

The general trend for today is bearish