USDJPY Analysis 23.01.2019

The US dollar rose during the Asian session to see its rebound to the tenth session in 15 sessions of its lowest since March 26 against the Japanese yen following developments and economic data that followed on the Japanese economy and on the eve of developments and data expected Wednesday by the US economy, The world is looking forward to what the Governor of the Bank of Japan, Haruhiko Kuroda, will say in Tokyo.

At 05:30 GMT, the USDJPY rose 0.26% to 109.65, compared with the opening levels at 109.37, after recording a high of 109.80 and a low of 109.33.

On the Japanese economy, the reading of the trade balance showed that the deficit shrank to 55 billion yen from 738 billion yen in November, in contrast to expectations that the deficit would narrow to 35 billion yen. The revised trade balance Deficit to 184 billion yen from 492 billion yen, exceeding expectations that the deficit shrank to 291 billion yen.

The annualized reading of exports showed a drop of 3.8% from 0.1% in the previous year's reading, worse than the 1.9% decline. The annual import reading showed that growth slowed to 1.9% from 12.5% Prior to November, as opposed to expectations of slower growth to 4.0%.

To the Bank of Japan's monetary policy makers to keep interest rates at 0.10%, which was expected in the markets, with the release of the monetary policy statement and before we see the industrial activity index showed a decline of 0.3% compared to 1.0% Last October, as opposed to expectations of a 0.4% drop, and ahead of a press conference by Japanese central bank governor Kuroda.

On the other hand, investors are looking for the US economy to reveal housing market data with the Home Price Index reading, which may reflect slowing growth to 0.2% vs. 0.3% in October, before we see the release of the Richmond Industrial Index which may The deflation shrank to a value of 6 to 8 in December.

Technical Analysis

The USDJPY rallied significantly higher yesterday after testing 109.16, and we note that the price completed the formation of a continuation of the bullish flag pattern after breaching the resistance of the descending sub-channel shown in the image, to get a positive incentive to enhance the chances of achieving our target at 110.24.

Therefore, we are expecting further upside in the coming sessions provided stability remains above 109.16, noting that Stochastic is providing positive signs to support the bullish outlook.

The trading range for today is expected among the support at 109.00 and the resistance at 110.73

Support and resistance:

Support: 108.39-107.82-106.88

Resistance: 109.83-110.73

The general trend for today is bullish