USDJPY analysis 13.12.2019

The US dollar rose during the Asian session to witness its highest since December 2, when it tested the highest since May 30 last, and is preparing for weekly gains against the Japanese yen after the developments and economic data that were followed by the Japanese economy, the third largest economy in The world is on the cusp of developments and economic data expected Friday by the US economy, the largest economy in the world.

At exactly 05:57 AM GMT, the US dollar pair rose against the Japanese yen by 0.23% to 109.56 levels compared to the opening levels at 109.31 after the pair achieved its highest since the beginning of this month at 109.63, while achieving the lowest during the trading session at 108.99.

On the Japanese economy, we have followed the release of the Tinkan Service Index reading, which showed a shrinkage in amplitude to 20 compared to 21 in the third quarter, surpassing expectations that indicated a shrinkage in the breadth of 16, while the Tinkan Industrial reading showed stability when Zero levels versus 5 in the third quarter are worse than expectations for shrinking expansion to 3.

This came before we also witnessed by the third largest economy in the world and the third largest industrial country in the world, the disclosure of industrial sector data with the release of the final reading of industrial production, which showed a widening decline to 4.5% compared to the previous initial reading for last October, contrary to expectations that It pointed to a decrease in the decline to 4.1%, compared to a rise of 1.7% last September.

On the other hand, investors are currently awaiting by the US economy the disclosure of the retail sales reading, which represents about half of consumer spending, which represents more than two thirds of the gross domestic product of the United States, which may reflect the acceleration of growth to 0.5% compared to 0.3% in October, as well as A substantial reading of the same indicator may show that growth accelerated to 0.4% compared to 0.2% in October.

This comes in conjunction with the release of the import price index, which may indicate a 0.2% increase compared to a 0.5% decline in October, while the annual reading of the same indicator may show a decline in the decline to 1.2% compared to 3.0% in the previous annual reading of October, And that is before we witness the disclosure of the business inventories reading, which may reflect 0.2% growth versus stability at zero levels last September.

It is noteworthy that during the meeting of the Federal Open Market Committee December 10-11, the Federal Reserve monetary policy makers kept short-term benchmark interest rates between 1.50% and 1.75% for the second meeting in a row, while revealing the expectations of the Federal Market Committee. Open to growth, inflation and unemployment rates as well as the future of interest on federal funds for the next three years.

The expectations of the members of the Federal Committee indicated that the Federal Reserve may keep interest rates during the next year 2020 unchanged, and in the same context, Federal Reserve Governor Jerome Powell noted during the press conference held on Wednesday following the meeting’s activities that it is possible for the Federal Reserve to expand activities Purchase short-term treasury bills if necessary to increase liquidity in the banking system.

We would like to point out that the Treasury Department launched a program to purchase treasury bills in the amount of $ 60 billion per month in October. This program is expected to continue until the second half of 2020, which aims to provide liquidity after interest in repo operations during September expanded to 10%, which paid Federal Reserve to carry out repo operations during the past two months, and these operations are the purchase of bonds and short-term debt from banks and hedge funds.

Technical analysis

The dollar versus yen made a strong breach of 109.33 and closed the daily candle above it, which stops the negative scenario suggested in our recent reports and leads the price to achieve more expected gains during the coming period, on the way to visit the 110.50 level as the next main target.

Therefore, a bullish bias will be favored for today, noting that holding above 109.33 is important for the expected bullish continuation.

The expected trading range for today is between 109.00 support and 110.50 resistance.

Expected trend for today: bullish.