USDJPY analysis 09.01.2020

The rise of the US dollar during the Asian session to witness its bounce for the second consecutive session from the lowest since October 10 against the Japanese yen amid the scarcity of economic data by the Japanese economy and on the cusp of developments and economic data expected today by the American economy, which includes the talk of members of the Committee Federalism for the open market and in the shadow of market pricing for the retreat of America and Iran from expanding engagement in the conflict between them.

At exactly 6:14 am GMT, the US dollar pair rose against the Japanese yen by 0.17% to 109.30 levels compared to the opening levels at 109.12, after achieving its highest level during the trading session at 109.32, while achieving the lowest at 109.01.

Investors are looking forward to the results of the speech of Fed member and Deputy Governor of the Federal Reserve Richard Clarda who will deliver a speech entitled "The American Economic Outlook and Monetary Policy" at the Council on Foreign Relations in New York, and this comes before we witness the issuance of the reading of aid requests for the week that ends in the fourth From January, which may reflect a decrease of 1 thousand requests to 221 thousand requests.

In the same context, the reading of the continuous benefit claims index for the week that ended on December 28 also showed a decline by 9 thousand applications to 1,719 thousand applications compared to 1,728 thousand applications, before we witnessed the dumping of another member of the Federal Committee, the governor of the Minneapolis Bank Federal Reserve Neil Kashari, opening speech at the Federal Reserve Regional Economic Conditions conference in Minneapolis.

To the talk of another member of the Federal Committee, New York Fed Governor John Williams, about targeting inflation at the Bank of England’s economic workshop in London, and that comes about a week after the minutes of the FOMC meeting held on December 10-11 December, by which he decided to keep interest rates at between 1.50% and 1.75% for the second meeting in a row.

We would like to point out, because Federal Reserve Governor Jerome Powell noted at the time during the press conference that the Fed’s meeting ended, that it is possible for the Federal Reserve to expand its activities to purchase short-term treasury bills if necessary to increase liquidity in the banking system, and this came In the wake of the October Treasury Department launching a $ 60 billion treasury bill program to purchase Treasury Bills per month.

Otherwise, yesterday we followed US President Donald Trump's response to the Iranian attack on the two Iraqi military bases hosting American and international coalition forces, with sanctions and not with violence, and in the coming period, Tehran has not issued any reports that it will respond with more than one of the ballistic missiles it launched from its lands on Two bases, Assad and Erbil, in response to the recent US air raid in Baghdad that resulted in the assassination of a commander of the Iranian Revolutionary Guards, Qassem Soleimani.

U.S. President Trump stated that no American was injured in the attack and that Tehran appeared to have retreated, with his announcement of Washington's intention to impose more sanctions on Iran and his emphasis on the importance of working to ensure that Tehran does not possess any nuclear weapon, calling on the international community to seek a new nuclear agreement. With Iran, adding that he would ask NATO to intervene in the Middle East and that his country possesses a strategic reserve of oil that sings it from the Middle East.

In the coming period, Iranian Defense Minister Amir Hatami yesterday said that the Iranian response will depend on what Washington will do and that it will be consistent with any reaction issued by the American side, explaining that his country is fully prepared to escalate in the event that America responds to Iran's recent attacks on the Assad and Erbil bases in Iraq, and this came in the wake of the announcement by Iranian Foreign Minister Mohammad Javad Zarif that the strikes "ended", explaining that Tehran, with this latest attack, responded to the killing of Soleimani.

Technical analysis

The dollar pair rose against the yen strongly yesterday, breaching the 108.40 level and reaching the outskirts of the 109.33 level, which provides signals on the price trend to achieve more expected gains during the upcoming sessions, noting that the breach of the last level will extend the upside wave to reach 110.50 as a next positive target.

On the other hand, we notice that the stochastic is showing negative signs that may pressure the price to fall again, therefore, we prefer stopping on the neutrality until the price confirms the breakout of the resistance 109.33 or the breaking of the 108.40 support to determine its next destination more accurately, while noting that breaking this support will put the price Under negative pressure again, heading towards 107.45 initially.

The expected trading range for today is between 108.40 support and 110.00 resistance.

Expected trend for today: neutral.