JPY analysis 19.06.2019

The US dollar fluctuated in a narrow range slipping towards the Asian session to see its third session retreat since June 11 against the Japanese Yen following the economic developments and data that followed on the Japanese economy and on the eve of developments and economic data expected Wednesday by the US economy larger The world economy, which includes industrial decisions and trends monetary policy of the Federal Reserve.

At 06:08 GMT, the US dollar was down 0.14% at 108.30, compared to the opening levels at 108.45, after reaching the lowest level at 108.29, while the highest at 108.62.

We followed the Japanese economy, the world's third-largest economy, by reading the trade balance index, which showed a deficit of 60 billion yen against a surplus of 56.8 billion yen in April, exceeding expectations of a deficit of 1,200 billion yen, while the seasonally adjusted index showed the same index widening Deficit to 609 billion yen against 170 billion yen in April, also surpassing expectations that the deficit widened to 807 billion yen.

The annualized reading of exports showed a decline of 7.8% compared to 2.4% in the previous year's reading for April, below expectations of a wide decline to 8.4%, while the annual import reading showed a decline of 1.5% compared with 6.5% in the previous year's reading For the month of April, worse than expectations for a slowdown in growth to 1.0%.

This comes hours after Japanese central bank governor Haruhiko Kuroda yesterday expressed a high uncertainty about the global economic outlook, explaining that the global economic developments will be discussed at the Bank of Japan's review of short-term interest rates starting today and Thursday in Tokyo, adding that the Bank of Japan Will discuss the risk of trade tensions between the United States and China and Britain's exit from the EU separately.

On the other hand, investors are currently looking at the FOMC meeting in which interest rates are expected to be kept between 2.25% and 2.50% as markets look to the Commission to reveal their expectations for growth rates, inflation and unemployment, Interest rate for the next three years, leading to the forthcoming press conference of Federal Reserve Governor Jerome Powell later in the day.

We would like to point out that Fed Governor Powell has already noted that the Federal Reserve does not know how and when trade tensions will be resolved, noting that the Commission is taking seriously inflationary pressures for an extended period that may affect inflation expectations later, The Federal Reserve is abandoning its policy of patience and cutting interest rates on federal funds in the coming period.

Technical Analysis

USDJPY hit our first target at 108.00 yesterday, but it rebounded significantly to settle around SMA 50, and as long as the price is below 108.80, our bearish outlook remains valid for the coming period, noting that the first target will extend the bearish wave to reach 106.75 as a next station.

The trading range for today is expected among the key support at 107.60 and the resistance at 109.00.

The general trend for today is bearish.