JPY analysis 26.06.2019

The US dollar rose during the US session to see its rebound for the second session of its lowest since January 3 against the Japanese yen amid a lack of economic data by the Japanese economy, the third largest economy in the world and on the eve of developments and economic data expected Wednesday by the US economy larger World economy.

At 05:59 GMT, the pair rose 0.23% to levels of 107.45 compared to the opening levels at 107.20 after reaching the highest level of trading at 107.50, while the lowest level at 107.10.

Investors are currently waiting for the US economy to release the Durable Goods Orders, which account for about half of consumer spending, which accounts for more than two-thirds of US GDP, which could reflect stability at zero levels versus a 2.1% drop in April, While the core reading of the index itself may show a 0.1% growth versus stability at zero levels in April.

This comes in conjunction with the release of the trade balance of goods which may show the deficit shrinking to $ 71.8 billion against $ 72.1 billion in April, and the initial reading of the Wholesale Inventories Index, which may indicate a slowdown in growth to 0.6% from 0.8% This comes hours after Federal Reserve Governor Jerome Powell spoke in New York, limiting opportunities for interest rate cuts by the next meeting.

In his speech on economic and monetary policy at the Council on Foreign Relations, Powell said that many members of the Federal Open Market Committee are expecting expansionary measures, adding that the strength of the economic fundamentals supports the continued pace of growth and employment, And the economy continues to grow, while inflation is at the Fed's target.

Powell also noted that the Federal Commission expects inflationary growth to grow despite inflation stabilizing below 2 per cent. He pointed out that the business and agriculture sectors were concerned by the escalation of trade tensions. He added that the Committee's expectations remained positive despite the increasing uncertainty, While confirming that the Fed is closely monitoring developments in the domestic situation with its full readiness to act appropriately.

Technical Analysis

USDJPY succeeded in achieving our awaited target at 106.75 but rebounded appreciably from there, nearing the pivotal resistance of 107.80, accompanied by stochastic loss of positive momentum and reaching oversold areas, while SMA 50 meets the mentioned resistance to add more From force to it.

Therefore, we believe that opportunities are available to resume the main bearish trend, which is organized within the descending channel shown in the image, while recalling that our next target reaches 106.00, while achieving stability requires below 107.80.

The trading range for today is expected among the key support at 106.60 and the resistance at 108.00.

The general trend for today is bearish.