JPY Analysis 30.08.2019

The US dollar fluctuated in a narrow range, tilted lower during the Asian session, while still the best weekly performance in six months and monthly losses against the Japanese yen following the developments and economic data that followed the Japanese economy, the world's third largest economy and on the eve of developments and economic data expected on Friday By the American economy the largest economy in the world.

At 05:59 AM GMT the USDJPY fell 0.15% to 106.36 levels from 106.52 opening levels, after hitting a session low of 106.34 and a high of 106.54.

The Japanese economy followed the release of inflation data with the release of the Tokyo Consumer Price Index (CPI) which showed a slowing pace of growth to 0.6%, in line with expectations, from 0.9% in July, as indicated by the core annual reading of the same index, which excludes fresh food The pace of growth slowed to 0.7% versus 0.9%, worse than expectations for a slowdown to 0.8%.

Meanwhile, the core annual reading of Tokyo's consumer price index, excluding fresh food and energy, showed a slower pace of growth to 0.7%, in line with expectations, against 0.8% in Toms July, coinciding with the release of labor market data which showed unemployment rates fell to 2.2 Compared to the previous reading of June and expectations of 2.3%.

This came before we witnessed by the third largest industrial country in the world revealed the preliminary reading of industrial production, which showed a rise of 1.3% compared to a decline of 3.3% last June, beating expectations for a rise of 0.3%, as the annual reading of the same index rose 0.7 The figure was down from 3.8% in the prior June reading, beating expectations for a 0.6% decline.

We also followed the release of the seasonally adjusted preliminary retail sales figure which showed a decline of 2.3% versus steady at zero levels in June, worse than expectations for a decline of 0.9%, while the annual reading of the same index showed a decline of 2.3% against a rise of 0.5%, also worse Expectations were for a 0.9% decline to the release of the housing market data with the release of the annual Housing Starts Index which showed a 4.1% decline versus a 0.3% rise in June, beating expectations for a 5.3% decline.

On the other hand, investors are currently awaiting the release of spending and personal income data by the US economy which may reflect the acceleration of personal spending growth to 0.5% vs. 0.3% in June, and the slowdown in personal income growth to 0.3% vs. 0.4% in June. Core CPE reading may show accelerated growth to 0.3% vs. 0.2% in June.

This comes ahead of the Chicago PMI reading, which may reflect a contraction in contraction to 48.1 from 44.4 in July, leading to the final release of the University of Michigan's consumer confidence index, which may show an expansion to 92.5 compared to the reading. The preliminary month for August was at 92.1 and against 98.4 in July.

Technical Analysis

USDJPY offered positive trading yesterday to test the pivotal resistance of 106.70, accompanied by the emergence of clear negative signals through Stochastic, to start the bounce down from the mentioned resistance, and we expect the continuation of the bearish inclination coming sessions, and targets start to break the level of 106.06 to open the way for the direction towards 105.05 As the next major station.

The continuation of the expected bearishness requires stability below 106.70.

Expected trading range for today is between 105.60 support and 107.00 resistance.

Expected trend for today: Bearish.