JPY Analysis 22.11.2019

The US dollar fluctuated in a narrow range, tilted lower during the Asian session to witness the bounce for the eighth session in twelve sessions from its highest since late May against the Japanese yen following the developments and economic data that followed from the Japanese economy and on the eve of developments and economic data expected on Friday before The US economy is the largest in the world.

At 06:06 AM GMT, the USDJPY fell 0.02% to 108.62 levels from the opening levels of 108.64 after the pair reached its lowest level during the session at 108.57, while the highest level at 108.71.

This was followed by the release of inflation data with the release of the annual CPI reading which showed a steady growth of 0.2% in October, contrary to expectations for accelerating growth to 0.3%, while the annual reading of the same index excluded food. Fresh growth accelerated to 0.4% in line with expectations versus 0.3%, and the annual reading of the same index excluding energy and fresh food accelerated growth to 0.7% against 0.5%, beating expectations of 0.6%.

This came before we witnessed the preliminary reading of the manufacturing PMI by Markit of Japan, the third largest economy in the world and the third largest industrial country in the world, which showed a contraction in contraction to 48.6 vs. 48.4 in October, contrary to expectations that contraction would shrink. To 48.7, a reading below 50 reflects contraction, while a reading at 50 or higher reflects widening.

On the other hand, investors are awaiting the release of the preliminary reading of the manufacturing and services PMI from the US, amid expectations that the initial reading of the industrial sector will expand to 51.5 vs. 51.3 in the previous reading for October, as may show the preliminary reading The Services PMI widened to 51.2 from 50.6 in October.

The final reading of the University of Michigan's consumer confidence index, which may show an expansion to 95.8 compared to 95.7 in the previous initial reading and 95.5 in October, comes hours after the release of last Wednesday's minutes of the FOMC meeting held on 29-30 October, when interest rates were cut for the third time in a row by 25 basis points to between 1.50% and 1.75%.

Technical Analysis

USDJPY is trading slightly positive, gradually moving away from 108.40, supporting the continuation of the bullish outlook, awaiting a break above SMA 50 to facilitate the task of achieving our first target at 109.33.

Thereby, we expect more bullish bias for today, noting that the continuation of the bullish wave depends on stability above 108.40.

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

Expected trend for today: Bullish.