JPY Analysis 12.09.2019

The US dollar rose during the Asian session to witness the bounce for the tenth session in fourteen sessions from the lowest since November 9, 2016, showing the highest since early August, when it tested the highest since late May against the Japanese yen following the developments and economic data It was followed by the Japanese economy and on the threshold of developments and economic data expected on Thursday by the US economy.

At 06:14 am GMT, the USDJPY rose 0.17% to 108.00 levels from 107.82 opening levels, after the pair reached a six-week high of 108.17, while the session low at 107.78 .

The Japanese economy followed the release of inflation data with the release of the PPI, which is a preliminary indicator of inflationary pressures that showed a contraction of 0.3% against steady at zero levels last July, worse than expectations for a 0.2% contraction. The annual contraction index widened to 0.9% vs. 0.6%, also worse than expectations for a 0.8% contraction.

This came with the release of machinery orders which showed a 6.6% decline versus a 13.9% rise in July, beating expectations for a 9.0% decline, while the annualized reading showed a slowdown in growth to 0.3% vs. 12.5%. The Tertiary Industrial Index showed a gain of 0.1% versus a decline of 0.1% in June, missing expectations for a 0.3% decline.

On the other hand, investors are waiting for the US economy to release inflation data with the release of the CPI reading which may reflect a slowdown in growth to 0.1% vs. 0.3% in July, and the core reading of the same index may show a slowdown in growth to 0.2% vs. 0.3%. While the annual reading of the same index may show the stability of growth at 1.8%, and the core annual reading of the same index may reflect the acceleration of growth to 2.3% vs. 2.2%.

This comes in conjunction with the release of the index of claims for the past week on September 7, which may reflect a decrease of 2 thousand applications to 215 thousand applications compared to 217 thousand tabs the previous weekly reading, while the reading of the claims application index may show investors for the past week at the end of August increased by 13K to 1,675K compared to 1,662K in the previous weekly reading.

Technical Analysis

USDJPY is resuming its positive trading with the opening today to reach the first awaited target at 108.30, reinforcing expectations for further gains in the coming sessions, supported by SMA 50, with a reminder that breaching the mentioned level will extend the bullish wave to 109.30.

Thus, a positive scenario remains likely unless 106.70 is broken and holds below it.

Expected trading range for today is between 107.70 support and 109.00 resistance.

Expected trend for today: Bullish.