USDJPY analysis 09.12.2019

The US dollar fluctuated in a narrow range tilted towards the decline during the Asian session, to witness its bounce to the fifth session in six sessions from the top since May 30, when it tested the highest for it since 23 of the same month against the Japanese yen after the developments and economic data that we adopted today on Monday. The Japanese economy and amid the scarcity of economic data on the US economy earlier this week, which carries the meeting of the Federal Open Market Committee.

At exactly 05:55 AM GMT, the US dollar pair fell against the Japanese yen by 0.07% to 108.57 levels compared to the opening levels at 108.65 after the pair achieved its lowest during the trading session at 108.54, while it achieved its highest at 108.72, knowing that The pair started trading this week on an upward price, after it concluded the trading last week at 108.58 levels.

On the Japanese economy, we have followed the disclosure of the seasonally adjusted final reading of GDP, which showed an acceleration in the pace of growth to 0.4% compared to 0.1% growth in the previous initial reading for the third quarter and compared to 0.3% growth in the previous reading of the second quarter, while the annual reading of the GDP showed Measured by prices, the growth is stable at 0.6%, also in line with expectations and against 0.4% growth.

In the same context, the seasonally adjusted annual final reading of GDP showed an acceleration of growth to 1.8% compared to 0.2% growth in the previous annual preliminary reading for the past quarter, outperforming expectations that indicated 0.6% growth and 1.6% growth in the second quarter annual reading, and this came In conjunction with the annual reading of the bank lending index, growth accelerated to 2.1%, in line with expectations, compared to 2.0% in October.

This came also in conjunction with the disclosure of the current account reading, which showed the widening of the surplus to 1,817 billion yen compared to 1.613 billion yen last September, outperforming the expectations that indicated the widening of the surplus to 1,807 billion yen, as the seasonally adjusted reading of the same indicator indicated the widening of the surplus to 1.732 billion yen from 1.485 billion yen in September, also beating forecasts of 1.731 billion yen.

The Japanese Cabinet Office revealed an ECO Watchers statistic reading of the current and future conditions, which showed the contraction of the current situation shrank to 39.4 compared to 36.7 in October, without expectations that the contraction would shrink to 39.7, as the reading of future conditions showed that the contraction decreased to 45.7 vs. 43.7, beating expectations of 44.6.

On the other hand, the markets are looking for tomorrow, Tuesday, for the launching of the activities of the Federal Open Market Committee meeting to be held tomorrow and the day after tomorrow Wednesday in Washington, which is expected to remain on the short-term benchmark interest rates for the second consecutive meeting at between 1.75% and 2.00% simultaneously. With the disclosure of the expectations of members of the Committee to the rates of growth, inflation and unemployment in addition to the future interest rates for the next three years.

Up to the press conference to be held by Federal Reserve Governor Jerome Powell on Wednesday, exactly half an hour after the end of the FOMC’s meeting to comment on the decisions of the Fed’s monetary policy makers, which has recently witnessed widespread criticism by US President Donald Trump who is calling on the Federal Reserve and his Powell Governor to go Move ahead to cut federal funds interest "to zero or less."

Technical analysis

The dollar versus the yen is trading near the pivotal support of 108.40, and it is located under the negative pressure formed by the EMA50, which supports the chances of breaking the aforementioned level to open the way for the continuation of the bearish bias during the upcoming sessions, where our next target is located at 107.45.

Therefore, we will continue to suggest the bearish trend over an intraday and short term unless 109.33 level is breached and stability above it.

The expected trading range for today is between 107.80 support and 109.00 resistance.

Expected trend for today: bearish.