USDJPY Analysis 21.02.2019

The US dollar fluctuated in a narrow range slipping towards the Asian session to see its rebound to its second-highest session since Feb. 14 against the Japanese Yen following developments and economic data that followed the Japanese economy, the third largest economy in the world and on the eve of developments and economic data expected today Thursday by the US economy, the world's largest economy.

At 06:10 GMT, the USDJPY dropped 0.11% to 110.73 from the opening levels at 110.85 after recording a low of 110.59 and a high of 110.87.

On the Japanese economy, we saw the initial reading of the industrial PMI, which showed a contraction at 48.5 versus an increase of 50.3 in January. From 0.5% in November, worse than the 0.2% drop.

Otherwise, we followed Wednesday the Japanese Finance Minister said that the issues related to the currency of his country, the Japanese yen, were not discussed in the recent trade talks with the United States last September, and that he would discuss this with US Trade Representative Robert Laitheiser himself later, Yen trade talks between Washington and Beijing, which investors always see as a safe haven for trade tensions.

This came hours after Bank of Japan Governor Haruhiko Kuroda on Tuesday told the Japanese parliament that the Bank of Japan was ready to expand stimulus if the yen's strong rise hurt the economy and hampered efforts to push inflationary pressures to the Bank of Japan's target of 2 percent, Among the Bank of Japan's expansionary policies is the interest rate cut and the size of the asset purchase program.

The Japanese government announced earlier this month a ten-day holiday from Saturday 27 April to Monday, May 6 next year for the celebrations of Japan's rise of the new emperor to rule there during the official holiday, and that to be crowned Crown Prince at the beginning of May, and we wish to point out that this six-day holiday will be the longest in Japan's history

On the other hand, investors by the US economy, the world's largest industrial nation, are looking to release the Philadelphia Manufacturing Index, which may reflect a narrowing to 14.1 versus 17.0 last January, in conjunction with the February 16 Jobless Claims reading Which could reflect a drop of 11K to 228K versus 239K last week.

This comes in conjunction with the release of the Durable Goods Orders, which account for nearly half of consumer spending, which accounts for more than two-thirds of US GDP, which could reflect accelerated growth to 1.6% from 0.7% in November. The core reading of the index itself is up 0.3% from 0.4% in November.

Before we see the preliminary reading of the PMI index for the United States of America for the month of February, amid expectations of the expansion of the service sector to 54.4 compared to 54.2 in January, and the stability of the industrial sector at 54.9 compared to 54.8 With little change from what it was in January.

To the release of housing market data with the release of the existing home sales index, which may reflect a rise of 1.5% to 5.01 million, compared with 6.4% decline at 4.99 million in December, coinciding with the release of the leading indicators for the month of January Which could show a 0.1% rise versus a 0.1% decline in December.

This came hours after the minutes of the Federal Open Market Committee meeting, which was held on 29-30 January, during which Federal Reserve policy makers kept interest rates at between 2.25% and 2.50% Cut bond repurchase by $ 50 billion a month, and the committee said it was determined to be patient and monitor economic data before resuming tightening monetary policy.

Technical analysis:

The USD / JPY pair has been trading sideways since yesterday, settling above SMA 50 which is good support for intraday trading, while Stochastic is beginning to provide a positive cross signal now.

Therefore, we believe that opportunities are available for resuming the expected bullish wave for the coming period, where our next target is at 111.56, while the price needs to stabilize above 110.24 to ensure the continuation of the suggested bullishness.

The trading range for today is expected among the support at 110.24 and the resistance at 111.56.

The general trend for today is bullish.