JPY analysis 26.04.2016

The US dollar fluctuated in a narrowly bullish range during the Asian session to see its rebound to its second-lowest session since April 11 against the Japanese yen following economic developments and data followed Friday by the Japanese economy, the world's third-largest economy and on the brink of economic developments and data. By the US economy, the world's largest economy.

At 0638 GMT, the greenback was up 0.06% at 111.70 from the opening at 111.63, after reaching a high of 111.79 and a low of 111.45.

We followed the Japanese economy to reveal inflation data with the release of the Tokyo Consumer Price Index (CPI), which showed accelerated growth to 1.4% from 0.9% in March, beating expectations for a 1.1% growth rate. The core of the index itself, excluding fresh food, accelerated to 1.3% from the previous reading and expectations at 1.1%.

In the same context, the core annualized reading, excluding fresh food and energy, showed a 0.9% growth rate from March and 0.7%, in conjunction with the release of Japanese labor market data, which showed unemployment at 2.5% versus 2.3%. In the previous reading for the month of February, worse than expectations, which indicated a rise to 2.3%.

This came ahead of the first seasonally adjusted retail sales, which showed a slowdown in growth to 0.2% from 1.4% in February, beating expectations for stability at zero levels, while the annual reading of the same index accelerated growth to 1.0% vs. 0.6 % In February, also outperforming forecasts that accelerated growth to 0.8%.

We also followed the third-largest industrialized country to reveal the preliminary reading of industrial production, which showed a decline of 0.9% compared to a rise of 0.7% in February, worse than expectations of a slowdown of growth to 0.1%, while the annual reading of the same index expanded the decline to 4.6% vs. 1.1% in the previous February reading, also worse than the 3.8% decline.

To the Japanese housing market data, with the annual reading of the Construction Starts Index showing growth accelerated to 10.0% from 4.2% in February, beating expectations for a rapid growth of 5.6%. The Bank of Japan will stay at 0.10% interest rates as we proceed with stimulus policies and monetary easing to support the performance of the economy.

In addition, we would like to point out that the Japanese government recently announced a ten-day holiday beginning on Saturday, 27 of this month until Monday, the sixth of next month, for the celebrations of Japan's rise of the new emperor to rule there during that official holiday, Prince Naruhito with the beginning of May next, and recall that the holiday, which will last six full working days will be the longest in the history of Japan.

On the other hand, investors are looking for the US economy to disclose the preliminary reading of GDP for the first quarter, which may show stability of the largest economy in the world at 2.2%, unchanged from the previous quarter, while may reflect the preliminary reading of GDP Total price-adjusted for the last quarter quarter slowed growth to 1.3% versus 1.8% in the fourth quarter.

This comes ahead of the final reading of the University of Michigan consumer confidence index, which may reflect a widening to 97.1 compared with the April reading of 96.9 versus 98.4 in March, to the disclosure of the US Treasury Department's semi-annual report on International economic policies and exchange rates.

Technical Analysis

USD / JPY broke the 111.80 level and settled below it, which supports our continued bearish outlook for the coming period, paving the way for targeting 110.08 as the next major station.

Moving below SMA 50 supports bearish expectations, while a breach of 112.14 and stability above it will stop the negative scenario and lead the price to resume the bullish trend in the short term.

The trading range for today is expected among the support at 110.80 and the resistance at 112.14.

The general trend for today is bearish.