JPY Analysis 19.11.2019

The US dollar fluctuated in a narrow range, tilted lower during the Asian session to witness the bounce for the seventh session in nine sessions from the highest since late May against the Japanese yen after the release of the Bank of Japan's semi-annual report on currency and monetary control and on the eve of developments and economic data expected Tuesday from The US economy has accepted the largest economy in the world, which includes the speech of the FOMC member and Chairman of the New York Federal Reserve Bank John Williams in Washington.

At 05:53 AM GMT, USD / JPY fell 0.08% to 108.59 levels from 108.68 opening levels, after hitting a session low of 108.46 and a high of 108.71.

Bank of Japan Governor Haruhiko Kuroda said through the Bank of Japan's semi-annual report on currency and monetary control that the Bank of Japan can deepen negative interest rates, explaining that the Bank of Japan could adopt deepening negative rates beyond -0.1%, adding that it did not He says the Bank of Japan can cut interest rates indefinitely and has unlimited ammunition to cut them.

BoJ Governor Kuroda also noted through the Bank of Japan's semi-annual report on currency and monetary control that the Japanese economy provides momentum to the BoJ's inflation target and that strong quantitative easing and monetary easing policies will continue, adding that the Bank of Japan's monetary policy makers are weighing costs And the benefits of quantitative easing and monetary easing.

On the other hand, investors are currently awaiting the US economy to release housing market data with the release of both housing starts and building permits and amid expectations that building permits will decline to 0.8% to about 1,381 thousand permits versus 2.7% at 1,387 thousand in September. September, while the start of construction may reflect a rise of 4.9% to about 1,318 thousand homes compared to a decline of 9.4% at 1,256 thousand homes.

The Federal Open Market Committee (FOMC) and New York Federal Reserve Chairman John Williams spoke at the Capital Markets Conference sponsored by the Securities and Financial Markets Industry Association in Washington, DC, hours after US President Donald Trump met with the Federal Reserve Governor. Jerome Powell at the White House in an unplanned meeting.

Earlier this week, US President Trump invited Powell to discuss the state of the domestic economy, particularly the pace of growth and inflation, as well as employment rates. The meeting included US Treasury Secretary Stephen Menushin, and Trump said the meeting was very good. Several topics were discussed including interest rates, negative interest rates and inflation.

Trump said he also discussed during his meeting with Powell and Minions his country's trade relations with China and the European Union as well as many other countries and the strength of the US dollar and the impact on the industrial sector of the largest industrialized country in the world, in addition to many other topics and issues. Powell's comments on the meeting were consistent with his recent testimony before Congress and did not address monetary policy expectations.

In the same vein, Fed Governor Powell reaffirmed that the course of monetary policy depends primarily on economic data and that members of the Federal Open Market Committee approve monetary policy as required by law to support maximum employment and price stability and that they rely in their decisions on careful analysis Objective, not political.

Last week, Powell noted the Fed's semi-annual testimony to Congress that his economy is in good shape, growth is moderate and the labor market is strong and he does not expect a looming economic catastrophe. This year, he said, adding that members of the Federal Reserve are currently assessing three rate cuts recently and their impact on the economy.

On Wednesday, markets are looking to unveil the minutes of the October 29-30 Federal Open Market Committee meeting, which approved a 25bp cut in interest rates for the third consecutive time to between 1.50% and 1.75%, amid the signal that Adjusting the Fed's monetary policy later would require significant and sustained inflationary movement to consider resuming rate hikes.

Technical Analysis

USDJPY is back to test the pivotal support of 108.40 and remains above it so far, noting that the stochastic has eliminated its negativity to reach oversold levels, awaiting the price to rebound upwards to resume the expected bullish trend for the coming period, whose first target is at 109.33.

From here, the bullish trend will remain intact over intraday and short term basis, noting that a break of 108.40 will pressure the price to turn lower and visit areas of 107.45 initially.

Expected trading range for today is between 108.00 support and 109.30 resistance.

Expected trend for today: Bullish.