JPY Analysis 25.10.2019

The US dollar fluctuated in a narrow range, tilted lower during the Asian session to witness its fourth session rebound in six sessions from the highest since early August, when it tested the highest since late May against the Japanese yen following the developments and economic data that followed from the Japanese economy third The largest economy in the world and on the eve of developments and economic data expected on Thursday by the US economy, the largest economy in the world.

At 05:55 AM GMT, the USDJPY fell 0.07% to 108.61 levels from the opening levels of 108.69, the pair's highest level during the session, while the pair achieved the lowest at 108.58.

We followed the preliminary reading of the Markit manufacturing PMI by Japan, the third largest industrial country in the world, which showed the contraction widened to 48.5 vs. 48.9 in September, contrary to expectations for a contraction to 49.2. The 50 barrier reflects contraction, while the reading at 50 or higher reflects widening.

On the other hand, investors are currently awaiting the US economy to release the Durable Goods Orders, which accounts for about half of consumer spending, which accounts for more than two-thirds of US GDP, which may reflect a 0.5% decline versus a 0.2% rise in August. In the past, the core reading of the index itself may show a 0.2% decline versus a 0.5% rise in August.

This comes in conjunction with the release of the index of claims for the last week on the 19th of this month, which may reflect an increase of two thousand applications to 216 thousand applications compared to 214 thousand applications in the previous weekly reading, while the reading of the claims application index may show investors for the past week on 12 of this The month decreased by 4 thousand applications to 1,675 thousand applications compared to 1,679 thousand applications.

Markets are also looking to reveal the preliminary reading of the US Manufacturing and Services PMI, amid expectations that the manufacturing sector will contract to 50.7 vs. 51.1 in September, while the preliminary reading of the Services PMI may show a widening of its value. 51.0 versus 50.9 in September.

The release of the US housing market data with the release of the new home sales index, which may reflect a decline of 0.4% to 710 thousand versus 7.1% rise at 713 thousand in August, comes before we see the US Treasury unveiled the federal budget reading which It could show a surplus of $ 83.5 billion versus a $ 200.3 billion deficit in August.

Technical Analysis

USDJPY has been trading sideways since yesterday, holding above 108.40, noting that the Stochastic is providing a positive crossover signal now, awaiting the price to resume the bullish corrective trend, which is aimed at testing 109.33 as the next stop.

Stability above 108.40 is important for the continuation of the expected rally, as breaking it will press the price to test 107.45 initially before determining the fate of the next price point.

Expected trading range for today is between 108.00 support and 109.40 resistance

Expected trend for today: Bullish