USDJPY analysis 24.12.2019

The US dollar fluctuated in a narrow range tilted to the upside during the Asian session against the Japanese yen, following the developments and economic data that were followed by the Japanese economy and on the cusp of developments and economic data expected on Tuesday by the US economy, the largest economy in the world.

At exactly 05:42 am GMT, the US dollar pair rose against the Japanese yen by 0.01% to 109.41 levels compared to the opening levels at 109.40 after the pair achieved its highest during the trading session at 109.44, while achieving the lowest at 109.36.

We have followed up on the Japanese economy to disclose the minutes of the Bank of Japan meeting held on the 19th of this month, during which monetary policy makers at the Bank of Japan decided to keep interest rates negative at 0.10%, and this came before we witnessed the disclosure of the annual core reading of the CPI Which indicated that growth slowed to 0.2% compared to the previous annual reading of last October and expectations at 0.3%.

We would like to point out that the Japanese Central Bank revealed last week a monetary policy statement that reflected the Bank of Japan’s offer of more flexibility in monetary policy while providing financing facilities for exchanged funds (ETF) with the aim of improving liquidity in the market of exchange-traded funds (ETF), and in In the same vein, the statement also touched upon at the time that "the economy was in the direction of moderate expansion".

The Bank of Japan also stated at the time through the monetary policy statement that the Japanese central bank “will take additional mitigation measures if there is a greater possibility of losing momentum towards achieving the goal of price stability.” This came after the Japanese government implemented in October increasing the consumption tax to 10 % Of 8%, which may weigh on consumer spending in the third largest economy in the world.

We would like to point out, because last week the Japanese government raised its growth forecast for the next fiscal year 2020/2021, which begins with the beginning of next April, to 1.4% compared to its previous forecast last July with a growth of 1.2%, while maintaining its expectations for growth during the current fiscal year which It expires at the end of next March at 0.9%, and this comes in the wake of the Japanese government's recent approval of a $ 122 billion financial package.

The expectations of the Japanese government that came after the progress in the trade talks between Washington and Beijing that resulted in a first-stage agreement between them and the decisive victory of British Prime Minister Boris Johnson in the British parliamentary elections, which limited Britain's chances of leaving the European Union without an agreement, included that private consumption will grow 0.6% In fiscal year 2019 compared to previous expectations 0.9% due to declining consumer confidence.

On the other hand, investors are currently awaiting by the US economy the disclosure of the Richmond Industrial Index reading, which may reflect a widening of 1 value versus a contraction at 1 in the previous reading last November, and this comes amid looking to the US Treasury to reveal Its semi-annual report on economic policies and the international exchange rate.

Technical analysis

The dollar against the yen continues to fluctuate near 109.33 and maintains its stability above it, which keeps our bullish expectations effective for the coming period, as the price gets continuous positive support from the EMA50, awaiting the direction towards 110.50 which represents our next main goal, while recalling the importance of stability Above 109.33 to continue the expected rise.

The expected trading range for today is between 108.80 support and 110.00 resistance.

Expected trend for today: bullish.