JPY Analysis 28.10.2019

The US dollar fluctuated in a narrow and bullish range during the Asian session to witness the rebound for the third session in four sessions from the lowest since October 15 against the Japanese yen following the developments and economic data that followed from the Japanese economy, the world's third largest economy and on the threshold of developments. The economic data expected on Monday by the US economy is the largest in the world.

At 06:18 am GMT, the USDJPY rose 0.06% to 108.73 levels from the opening levels of 108.67, the pair's lowest level during the session, while the pair reached its highest level during the session at 108.79.

The Japanese economy followed the release of the annual Services Price Index which showed growth steady at 0.5%, little changed from last August, in line with expectations. Otherwise, markets are looking for the decisions and direction of monetary policy makers at the Bank of Japan and the release of the policy statement. The Bank of Japan (BoJ) is due to hold a press conference on Thursday ahead of a press conference by Bank of Japan Governor Haruhiko Kuroda in Tokyo.

On the other hand, investors are currently awaiting the US economy to reveal the initial reading of the wholesale inventory index which may reflect the acceleration of the pace of growth to 0.3% vs. 0.2% in August. $ 73.5 billion compared to $ 72.8 billion in August.

On the other hand, markets are looking forward to the opening of the Federal Open Market Committee meeting in Washington tomorrow, which is expected to cut the federal funds rate by 25 basis points for the third consecutive meeting to between 1.50% and 1.75% before the upcoming press conference of the Governor of the Bank. Federal Reserve Jerome Powell on Wednesday, following US President Donald Trump's call for further stimulus and rate cuts.

Investors are also looking to unveil the preliminary third quarter GDP for the United States on Wednesday, which could show a slowing pace of growth for the world's largest economy to 1.6% versus 2.0% in the second quarter. The quarterly growth slowed to 1.8% from 2.4% in the second quarter.

Preliminary data on the US labor market is also expected to be released on Wednesday with the release of the private sector employment change, which may reflect a slower pace of job creation to 125,000 jobs versus 135,000 in September, hours before the release. Monthly Non-Farm Payrolls and Unemployment Rate plus Hourly Income for October.

Technical Analysis

USDJPY is starting to provide quiet positive trading today, in an attempt to resume the expected bullish trend for the coming period, which is continuously supported by SMA 50, and we believe that the path is open to our key target at 109.33.

Therefore, we hold onto our bullish outlook provided that stability is above 108.40, noting that breaching the target will extend the bullish wave to 110.50 as the next stop.

Expected trading range for today is between 108.20 support and 109.50 resistance

Expected trend for today: Bullish