USDJPY analysis 10.12.2019

The US dollar fluctuated in a narrow range tilted to the upside during the Asian session against the Japanese yen after the developments and economic data that it followed on the Japanese economy and on the cusp of developments and economic data expected today by the US economy, the largest economy in the world, which includes the launch of the activities of the Federal Open Market Committee meeting in Washington.

At exactly 06:01 am GMT, the US dollar pair rose against the Japanese yen by 0.06% to 108.62 levels compared to the opening levels at 108.56 after the pair achieved its highest during the trading session at 108.66, while achieving the lowest at 108.55.

We have followed about the Japanese economy, the Bank of Japan revealed the annual reading of the M-2 bank lending index, which showed accelerated growth to 2.8% compared to 2.4% in the previous annual reading of last October, and this came before we witnessed the release of the annual preliminary reading of the rates index The machines for the last month, which reflected the widening of the decline to 37.9% compared to 37.4% in the previous preliminary reading for the month of October.

On the other hand, investors are currently awaiting by the US economy the disclosure of the final reading of the productivity index and the cost of one work, and it is expected that the productivity index reading will show a 0.3% decline compared to a 0.1% decline in the initial reading for the third quarter and a growth of 2.3% in the previous reading of the second quarter last , While the cost index reading may show a slowdown in growth to 3.4% compared to 3.6% in the first reading and 2.6% in the second quarter.

Other than that, the markets are looking forward to the launching of the FOMC meeting, which takes place today and tomorrow, Wednesday in Washington, through which the short-term reference interest rates for the second consecutive meeting are expected to remain between 1.75% and 2.00% in conjunction with the disclosure of Committee members' expectations for growth, inflation and unemployment rates, as well as the future of interest rates for the next three years.

Up to the press conference to be held by Federal Reserve Governor Jerome Powell tomorrow, exactly half an hour after the FOMC meeting ends to comment on the decisions of the Federal Reserve monetary policy makers, which has been witnessing widespread criticism recently 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 continues to fluctuate near the 108.40 level, as it faces continuous negative pressure coming from the EMA50, while the stochastic indicator is clearly losing its positive momentum to enter the overbought areas.

Thus, we believe that opportunities are available to resume the downside movement during the upcoming sessions, and the price needs to break the 108.40 level to confirm the rally towards 107.45, while noting the importance of holding below 109.33 to continue the expected decline.

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

Expected trend for today: bearish.