JPY Analysis 26.11.2019

The US dollar fluctuated in a narrow bullish range during the Asian session to witness the highest since November 12 against the Japanese yen following the speech of Fed Governor Jerome Powell in addition to the developments and economic data that followed from the Japanese economy, the third largest economy in the world Economic developments and data expected on Tuesday by the US economy, the largest economy in the world.

At 05:59 AM GMT, the USDJPY rose 0.03% to 108.96 levels from the opening levels of 108.93 after hitting a two-week high of 109.21, while a session low of 108.92.

The Japanese economy followed the release of inflation data with the release of the annual Services Price Index which showed growth accelerated to 2.1% from 0.5% last September, beating expectations for a 1.8% growth. The Bank of Japan released its core annual CPI reading which showed growth stabilized at 0.3% last month, below expectations for 0.4%.

On the other hand, we have just followed the speech by Fed Governor Jerome Powell, titled “Building on the Gains from Long Expansion” at the Providence Chamber of Commerce annual meeting in Rhode Island. Wholesale inventories may reflect a rise of 0.2% versus a decline of 0.4% last September.

This comes in conjunction with the release of the Trade Balance of Goods, which may show the widening deficit to $ 71.3 billion versus $ 70.4 billion in September, and before the release of US housing market data with the release of the house price index, which may show accelerated growth to 0.5% vs. The S&P House Price Index showed annual growth accelerated to 2.1% in August from 2.0% in August.

Concerning the release of the Consumer Confidence reading, which may show an expansion to 126.9 vs. 125.9 last October, coinciding with the release of Richmond Industrial Index which may reflect a decline in the expansion to 6 vs. 8 in October, With the release of the New Home Sales, which may show a 1.0% rise to 708K versus a 0.7% decline at 701K in September.

Later in the day, investors were also awaiting FOMC member and Fed Governor Lyle Brennard's speech on a review of the Fed's monetary policy strategy framework as well as tools and communication at the New York Business Economics Association Awards in New York.

Technical Analysis

USDJPY traded markedly positive yesterday, approaching our first awaited target of 109.33, and waiting to cross this level to open the way for further positive targets reaching 110.50.

In general, we continue to favor the bullish trend, provided that it holds above 108.40, noting that the current stochastic negativity may cause a temporary decline before resuming the expected rise.

Expected trading range for today is between 108.40 support and 109.70 resistance.

Expected trend for today: Bullish.