JPY Analysis 11.11.2019

The US dollar fluctuated in a narrow range, tilted lower during the Asian session to witness a rebound for the third session from its highest since late May against the Japanese yen following the developments and economic data that followed from the Japanese economy and amid the lack of economic data by the US economy on Monday because of a day off Veterans of the USA.

At 05:56 AM GMT, the USDJPY fell 0.14% to 109.06 levels from the opening levels of 109.21, after the pair reached its lowest level during the session at 109.00, while the highest level at 109.26, knowing The pair started this week on a bearish price gap after closing last week at 109.26 levels.

The Japanese economy followed the release of the Bank of Japan's Bank of Japan Lending Annual Report which showed that October's growth was stable at 2.0% in line with expectations, coinciding with the release of the Core Machinery Equipment Orders reading which showed an expansion. Decline to 2.9% vs. 2.4% in September, beating expectations for a 0.9% rise.

We also followed by the third largest economy in the world the current account reading showed that the surplus shrank to 1.613 billion yen from 2,158 billion yen in August, worse than expectations for a surplus to shrink to 1,710 billion yen, the revised reading showed. The seasonally adjusted index shrank to 1,485 billion yen from 1.720 billion yen in August, also worse than expectations for 1,664 billion yen.

This came before the Japanese Cabinet Office unveiled the EcoWatchers statistic reading of the current and future conditions, which showed that the contraction of the current situation widened to 36.7 vs. 46.7 in September, worse than expectations that the contraction widened to 40.6, while the future reading showed Deflation contracted to 43.7 from 36.9 in September, beating expectations of 41.9.

On the other hand, investors are awaiting the outcome of the FOMC member and Chairman of the Federal Reserve Bank of Boston, Eric Rosengren at the Norwegian Central Bank in Oslo, hours before the start of the semi-annual testimony of the Federal Reserve Governor Jerome Powell before the US Congress in Washington. .

Markets are looking ahead Wednesday to the first half of the Fed's semi-annual policy testimony before the House Financial Services Committee, before Powell will deliver the second half of his testimony before the Senate Banking Committee next Thursday. Federal funds rate of 25 basis points for the third consecutive meeting at its last meeting.

At a press conference late last month following the October 29-30 FOMC meeting in Washington, Powell noted that the Federal Reserve would temporarily stop adjusting monetary policy until the end of the year. Unless expectations change substantially in the coming period.

Technical Analysis

USDJPY found it difficult to break above 109.33, bouncing down on a possible test of pivotal support 108.40, noting that SMA 50 continues to support the price from below, while the stochastic has cleared its negative momentum to oversold areas.

Therefore, these factors encourage us to continue to favor the bullish trend for the coming period, whose targets start by breaching 109.33 to open the way to visit 110.50 as the next target, while stability above 108.40 is an important condition for achieving the suggested targets.

Expected trading range for today is between 108.40 support and 110.00 resistance.

Expected trend for today: Bullish.