JPY analysis 21.06.2019

The US dollar fell for the fourth session in a row, the lowest since January 3, and is expected to worse than its weekly performance since March against the Japanese yen following developments and economic data that followed the Japanese economy and on the eve of developments and economic data expected Friday By the US economy, the world's largest economy.

At 05:51 GMT, the USDJPY declined 0.15% to 107.14 from the opening levels at 107.30 after the pair hit a 5-month low of 107.05, while the highest in the session at 107.37.

We followed the release of Markit Industrial PMI's preliminary reading of Japan, the world's third-largest industrial country, which showed a contraction of 49.5 versus 49.8 in May, above expectations of a 50.0 expansion, A reading below 50 indicates a contraction of the sector, while reading at 50 or higher reflects a widening of the sector.

In addition, Thursday we followed the Bank of Japan's decision to keep interest rates at 0.10%, which was expected in the markets, coinciding with the disclosure of the monetary policy statement, during which the Japanese central bank raised the concern about external risks that threaten to impede the fragile economic recovery , Amid the reference to weak exports, which is the nerve of the third largest economy in the world in addition to the decline of the industrial sector recently.

On the other hand, investors are currently waiting for the US economy to disclose the preliminary reading of the PMI industrial and service index market for the United States, the largest industrial world, amid expectations for the stability of the expansion of the industrial sector at 50.5, unchanged from the previous reading of the previous month, compared to 50.6 In May, and the service sector expanded to 51.0 compared with the initial reading of 50.9 versus 53.0 in May.

This comes ahead of the release of housing market data with the Existing Home Sales Index reading, which could reflect a 1.2% rise to 5.29 million homes versus a 0.4% drop at 5.19 million homes last April, Fed Governor Lyle Prinard at the opening of the monetary policy summit of the Federal Reserve Bank of Cloveland in Cincinnati.

The Fed's monetary policy makers agreed last Wednesday to stay benchmark rates between 2.25% and 2.50% for the fourth consecutive meeting at the Federal Open Market Committee meeting on June 18-19 in Washington, During which the Federal Commission's expectations of growth rates, inflation and unemployment as well as future interest rates for the next three years.

On Wednesday, the Federal Reserve dropped the word "patient" from its statement and added, "We will act as necessary" to maintain the economy, which reflects the opening for a possible reduction in federal interest rates later. Eight members see a reduction this year, knowing that the average forecast did not reflect any reduction this year, but next year 2020.

Federal Reserve Governor Jerome Powell said at a press conference after the meeting in Washington on Wednesday that some monetary policy makers in the Fed believe that the issue of soft monetary policy has been strengthened, stressing that the Committee will continue to monitor developments and economic data closely during the coming period To determine the future of monetary policy depending on those developments and data.

Technical Analysis

USDJPY continues to decline strongly near the extended target at 106.75, and the price is moving within the descending channel appearing in the image, which supports the chances of a downside wave extending to the 106.00 areas in the coming period.

Therefore, we expect the bearish trend to continue to be supported by the negative pressure formed by SMA 50, provided that the price remains stable below 107.80.

The trading range for today is expected among the support at 106.30 and the resistance at 107.80.

The general trend for today is bearish.