JPY analysis 20.06.2019

The US dollar fell during the Asian session to see its lowest since January 4 against the Japanese yen following developments and economic data that followed on the Japanese economy and on the eve of developments and economic data expected Thursday by the US economy, the largest economy in the world and following industrial decisions and trends Monetary policy of the Fed and the Bank of Japan.

At 06:02 GMT, the USDJPY dropped 0.43% to 107.63 from the opening levels at 108.10 after the pair reached a five-month low of 107.55, while it reached its highest level in the session at 108.14.

We followed the BOJ's decision to hold negative interest rates at 0.10%, which was expected in the markets, coinciding with the release of the monetary policy statement in which BOJ monetary policy makers expressed growing concern over external risks that threaten to hinder economic recovery. Amid signs of weak exports, the third largest economy in the world, in addition to the recent decline in the industrial sector.

This came ahead of a press conference held by Governor of the Bank of Japan Haruhiko Kuroda, in which he stressed the need to proceed with an expansionary monetary policy in light of the high uncertainty about the global economic outlook, and before witnessing by the third largest industrial world to disclose the overall index Industrial activity, which showed a 0.9% gain versus a 0.3% drop in March, was above expectations of a 0.2% rise.

On the other hand, investors are currently waiting for the US economy to release the current account, which may reflect a contraction of the deficit to $ 125 billion compared to $ 134 billion in the fourth quarter, coinciding with the disclosure of the Philadelphia Industrial Index by the largest industrial country in the world May reflect the contraction of the widening to 10.6 versus 16.6 last May.

This comes in conjunction with the reading of the index of claims for the week ending on the 15th of this month, which may reflect a decrease by two thousand requests to 220 thousand requests compared to 222 thousand requests in the previous weekly reading, as may be clear reading the index of continuing claims for the week of the eighth in the eighth Of the month fell by 15 thousand applications to 1,680 thousand applications compared to 1,695 thousand applications.

Leading to the release of leading indicators that may show a contraction of 0.1% vs. 0.2% last April, hours after the FOMC meeting of 18-19 June ended. Interest rates between 2.25% and 2.50% and disclosure of the Federal Commission's expectations of growth rates, inflation and unemployment as well as future interest rates for the next three years.

Technical Analysis

USDJPY pair dropped sharply yesterday to break the 108.00 level and starts today with another strong decline to confirm the breach and move around 107.60, which supports our continued bearish outlook for the intraday and short term, and is open to targeting the previously recorded low at 106.75 as the next major station.

SMA 50 continues to support the suggested bearish wave, which requires stability to remain below 106.00.

The trading range for today is expected among the support at 106.80 and the resistance at 108.00.

The general trend for today is bearish.