USD/JPY analysis 02.12.2019

The US dollar fluctuated in a narrow uptrend range during the Asian session to witness the highest since May 30, when it tested the highest since 23 of the same month 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 ahead of the US economy, the largest economy in the world.

At 06:19 am GMT, the dollar against the Japanese yen rose 0.12% to 109.64 levels compared to the opening levels at 109.51 after the pair achieved its highest in more than six feel at 109.73, while the lowest during the session at 109.48 .

On the other hand, the Japanese economy followed the release of the Capital Expenditure Index, which showed growth accelerated to 7.1% vs. 1.9% in the previous quarter, surpassing expectations for an acceleration of growth to 5.1%, while the reading of the same index excluding software showed a rise of 7.7%. Down from 1.7% in the second quarter.

This came before we saw the final reading of the manufacturing PMI by Markit of Japan, the third largest industrial country in the world, which showed contraction shrinking to 48.9 compared to the initial reading of last month and expectations at 48.6 and compared to 48.4 last October. Indication that the reading at 50 or higher reflects an expansion, while a lower than 50 indicates contraction.

On the other hand, investors are awaiting the US economy to reveal the final reading of the manufacturing PMI by Markit from the US which may reflect the stability of the expansion at 52.2, little changed from the initial reading of last month and against 51.3 in October. Before we saw the release of the construction spending index, which reflects the slowdown in growth to 0.3% compared to 0.5% last September.

This comes in conjunction with the revelation by the world's largest industrialized countries that the ISM reading could show contraction shrinking to 49.2 vs. 48.3 in October. Its value was 47.0 versus 45.5 in October.

Technical Analysis

The USDJPY has provided positive trading away from 109.33, reinforcing expectations for a bullish short-term trend to continue, with its next target at 110.50.

SMA 50 and Stochastic are providing positive signals that support the expected rise, which will remain valid unless 109.33 is broken and stability below it.

Expected trading range for today is between 109.00 support and 110.30 resistance.

Expected trend for today: Bullish.