09.09.2019
The US dollar fluctuated in a narrow uptrend range during the Asian session to witness the bounce for the seventh session in eleven sessions from the lowest since November 9, 2016 against the Japanese yen following the developments and economic data that followed on Monday on the Japanese economy, the world's third largest economy Amid a dearth of economic data earlier this week by the US economy, the world's largest economy.
At 05:57 AM GMT, the USDJPY rose 0.01% to 106.87 levels from the opening levels of 106.86, after the pair reached its highest level during the session at 107.02, while the lowest level at 106.76.
The Japanese economy followed the release of the seasonally adjusted final GDP figure, which showed growth slowed to 0.3%, in line with expectations, compared with 0.4% growth in the previous quarter prior to the second quarter and 0.6% growth in the previous quarter. GDP measured in prices stabilized at 0.4%, also in line with expectations and against 0.1% growth.
In the same context, the seasonally adjusted annualized final GDP figure showed growth slowed to 1.3% in line with expectations compared to 1.8% growth in the prior quarterly annual reading and against 2.2% growth. 1.65 trillion yen versus 1.94 trillion yen in June, worse than expectations for a narrowing surplus to 1.70 trillion yen.
The seasonally adjusted reading of the Current Account showed that the surplus widened to 2.00 trillion yen from 1.21 trillion yen in June, below expectations of 2.05 trillion yen, coinciding with the release of the Bank of Japan's annual bank lending index. Growth slowed to 2.1% compared to the prior yearly reading for July and expectations for 2.3%.
The Japanese Cabinet Office revealed that the ECOWATCHS statistic of the current and future conditions showed that the contraction of the current situation shrank to 42.8 from 41.2 in July, contrary to expectations that the contraction would widen to 41.4. Its value was 44.3, little changed from what it was in July.
USDJPY is retesting the breached neckline of the double-bottom pattern shown above, and holds it above it so far, noting that the Stochastic is providing a positive crossover signal now, while SMA 50 supports the price from below.
Therefore, these factors encourage us to maintain our bullish expectations over the coming period, with the next targets at 108.30 then 109.30, while achieving them requires stability above 106.70.
Expected trading range for today is between 106.20 support and 107.70 resistance.
Expected trend for today: Bullish.
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