JPY Analysis 18.07.2019

The US dollar fell during the US session to rebound to the fifth session in seven sessions of the highest since May 31 against the Japanese yen following developments and economic data that followed the Japanese economy, the third largest economy in the world and on the eve of developments and economic data expected on Thursday by The US economy is the largest economy in the world.

At 05:52 GMT, the US dollar was down 0.25% to 107.68 from the opening level at 107.95, after hitting its lowest level since July 3 at 107.64. Trading session at 108.00.

We followed the Japanese economy's reading of the trade balance index, which showed the deficit shrank to 14 billion yen against a surplus of 622 billion yen in May, exceeding expectations that the deficit shrank to 141 billion yen, while the seasonally adjusted index The same as a surplus of 590 billion yen against a deficit of 968 billion yen in May, also outperforming expectations of a surplus of 404 billion yen.

This came in contrast to the annualized reading of exports, which fell to 6.7% from 7.8% in the previous reading for May, below expectations of a decline of 5.4%. The annual reading of imports showed the decline to 5.2% compared to 1.5% Earlier than in May, worse than expectations of a contraction of 0.2%.

This comes hours after Bank of Japan Governor Haruhiko Kuroda said that the Japanese economy will continue to grow at a moderate pace and domestic demand is stable, noting that there are many risks that threaten the outlook for global economic growth and its evidence that the global economy is growing at a moderate pace. The Japanese may expand the adoption of stimulus in the case of weakening inflationary pressures, which hinders access to inflation target at 2%.

On the other hand, investors are currently looking for the US economy to read the index of claims for the week ending on 13 of this month, which may reflect a rise of 7 thousand applications to 216 thousand applications, while may show the reading of the index requests for aid investors for the week of the sixth of this month Down 23,000 to 1,700,000.

The markets are also looking to release the Philadelphia Manufacturing Index, which may reflect a widening to 5.0 vs. 0.3 in June, ahead of the leading index reading, which could show 0.1% growth versus zero in May, And Federal Reserve Bank of New York Chairman John Williams on monetary policy at the annual meeting of the Central Bank Research Association in New York.

Technical Analysis

The USDJPY broke the neckline of the head and shoulders pattern mentioned in our latest report, to do the negative impact of this pattern, which supports expectations for a continuation of the bearish trend over the coming period, opening the way towards 106.78 which is our next main target.

Therefore, we are awaiting further bearishness over intraday and short term, provided that the price remains steady below 108.10 - 108.30.

The trading range for today is expected among the support at 107.00 and the resistance at 108.30

The general trend for today is bearish.