JPY Analysis 05.09.2019

The US dollar fluctuated in a narrow uptrend range during the Asian session to witness the bounce for the sixth session in nine sessions from the lowest since November 9, 2016 against the Japanese yen amid the lack of economic data by the Japanese economy and on the eve of developments and economic data expected on Thursday from In the wake of China's announcement that it will enter a new round of trade talks with the United States by next month in Washington.

At 05:52 AM GMT the USDJPY rose 0.16% to 106.56 levels from 106.39 opening levels, after hitting a session high of 106.75 and a low of 106.33.

Investors in the US economy are looking ahead to the release of preliminary labor market data with the release of the change in the private sector jobs index which may reflect the slowing pace of job creation to 148 thousand jobs compared to 156 thousand jobs in July, hours before The monthly report on non-farm payrolls and unemployment rates as well as the hourly income rate for August.

This comes before we also witnessed by the largest economy in the world to reveal the final reading of the productivity index and the cost of one work, and is expected to show the productivity index slower growth to 2.2% compared to 2.3% growth in the initial reading for the second quarter and against 3.4% growth in the previous reading For the first quarter, while the cost index reading may show growth accelerated to 2.5% compared to 2.4% in the initial reading and against a contraction of 1.6% in the first quarter.

This comes in conjunction with the release of the jobless claims figure for the past week at the end of August, which may reflect stability at 215K, unchanged from the previous weekly reading, while the jobless claims reading for the week past August 24 may show a decline. 10 thousand applications to 1,688 thousand applications compared to 1,698 thousand applications in the previous weekly reading.

The Markit Institute for Services PMI final reading for the US may reflect an expansion to 51.0 compared to 50.9 in August and 53.0 in July, before the ISI reading may be released. It expanded to 54.0 from 53.7 in July, coinciding with the release of factory orders which could show growth accelerated to 1.0% from 0.6% in June.

Beijing has said it will hold trade talks with Washington in early October, boosting investors' hopes of resolving trade disputes between the world's two largest economies, particularly after the start of a trade war with the United States earlier this month. After imposing new tariffs on each other's goods in a new escalation of trade disputes between them.

Technical Analysis

The USDJPY is trading today with a noticeable positivity to test the pivotal resistance of 106.70, accompanied by the emergence of clear negative signs through Stochastic, which is a negative catalyst that is expected to push the price down again and protect the mentioned resistance.

Therefore, we hold onto our bearish outlook, provided that it holds below 106.70, noting that our next major target is 105.05.

Expected trading range for today is between 105.70 support and 107.20 resistance.

Expected trend for today: Bearish.