JPY analysis 09.08.2019

The US dollar fell during the Asian session to witness the bounce for the sixth session in seven sessions from its highest since May 31 last and is the second weekly loss in a row against the Japanese yen following the developments and economic data that followed from the Japanese economy and on the eve of developments and economic data expected today Friday by the largest US economy in the world.

At 06:10 am GMT, the US dollar against the Japanese yen fell 0.20% to 105.86 levels compared to the opening levels at 106.07, after the pair reached its lowest level since August 7, when it tested the lowest since the third of Last January it was at 105.73, while it hit a session high of 106.09.

The Japanese economy followed the release of the seasonally adjusted preliminary GDP figure, which showed growth slowed to 0.4% vs. 0.6% in the previous quarter, surpassing expectations for a slowdown to 0.1%. Growth slowed to 1.8% versus 2.8% in the prior quarterly reading, contrary to expectations for a slowdown of 0.5%.

In the same context, the preliminary annualized GDP reading showed that growth accelerated to 0.4% vs. 0.1%, beating expectations of 0.3%. This coincided with the disclosure of the annual reading of the bank lending index which showed that the growth accelerated to 2.4% compared to the annual reading. Last June and forecasts at 2.3%.

On the other hand, investors are awaiting the US economy to reveal the PPI reading, which is a preliminary indicator of inflationary pressures that may reflect the acceleration of growth to 0.2% vs. 0.1% in June, while the core reading of the same indicator may show growth slowed to 0.2%. Against 0.3%, while the annualized reading of the index itself and the core annualized reading of the index may show growth stability at 1.7% and 2.3% respectively.

Technical Analysis

USDJPY is showing a slight bearish bias after the rally seen in the previous sessions, and we note that Stochastic is providing negative signs that support the chances of continuing the decline in the coming period, to continue to favor the downside targeting 105.50 then 104.60 as the next major stops.

SMA 50 supports the bearish outlook, while stability below 106.97 is an important condition for achieving the suggested targets.

Expected trading range for today is between 105.10 support and 106.60 resistance

Expected trend for today: Bearish.