USDJPY Analysis 01.03.2019

The US dollar rose during the Asian session, its highest since December 20, against the Japanese yen, its fourth straight gain after last month's first monthly gain in three months, following developments and economic data that followed the Japanese economy. Fed Chairman Jerome Powell in New York on the eve of economic developments and data expected Friday by the US economy, the largest economy in the world.

At 05:42 am GMT, the USDJPY rose 0.28% to 111.70 compared with the opening levels at 111.39 after the pair reached a two-month high of 111.77 and the lowest at 111.33.

On the Japanese economy, the Unemployment Rate Index rose to 2.5% from the December reading and expectations of 2.4%. This coincided with the release of inflation data. The Tokyo CPI showed an acceleration of growth to 0.6% Compared to the previous January reading and expectations of 0.4%.

In the same context, we also followed the release of the Tokyo Core CPI excluding fresh food, which showed stability at 1.1%, unchanged from January, above expectations of 1.0% For the same index, excluding fresh food and energy, growth stability at 0.7% is consistent with expectations.

This was before the world's third-largest economy saw the Capital Expenditure Index (CPI) showing growth acceleration to 5.7% from the previous quarter's reading and expectations of 4.5%, coinciding with the release of the Industrial PMI final reading which showed shrinking shrinkage To 48.9 from February's preliminary reading and expectations at 48.5, compared to a 50.3 expansion in January.

On the other hand, we followed the speech of US Federal Reserve Governor Jerome Powell on "Recent economic developments and long-term challenges" at the New York Citizens' Budget Committee dinner, hours before the economic data released today by the world's largest economy Which includes the publication of spending and personal income readings for the months of December and January.

Investors are also looking for a final PMI reading by Markit on the US last month, which may reflect the stability of the widening at 53.7 vs. 54.9 in January, before the ISI manufacturing index was released, which may show a contraction of 55.6 Compared to 56.6 in January, while the same indicator of price indices may show a widening to 51.6 versus a contraction at 49.6.

This comes in conjunction with the final release of the University of Michigan Consumer Confidence Index, which may reflect a widening to 95.8 from February's preliminary reading of 95.5 versus January's 91.2, as well as consumer expectations of inflationary pressures for a year and five years.

Technical Analysis

The USDJPY succeeded in achieving our awaited target at 111.56 and breaching it to settle above it, which supports the chances of a short term upside wave extending within the ascending channel appearing in the image, paving the way for a recent high at 113.70 as the next key target.

From here, we expect the upside movement to continue in the coming sessions, taking into consideration that the break below 111.56 and stability below it will stop the suggested bullish price and put the price under negative pressure expected over the intraday.

The trading range for today is among the key support at 111.00 and resistance at 112.55

The general trend for today is bullish