USDJPY analysis 14.01.2020

The fluctuation of the US dollar in a narrow range tilted to the upside during the Asian session to witness the highest since May 23 against the Japanese yen after the developments and economic data that were reported by the Japanese economy, the third largest economy in the world after each of the United States and China and on the cusp of developments and economic data Expected today, Tuesday, by the US economy and amid optimism that the prospect of America and China will sign the first phase of the trade agreement.

At exactly 6:13 am GMT, the US dollar pair rose against the Japanese yen by 0.13% to 110.09 levels compared to the opening levels at 109.94, after having achieved the highest level in eight months at 110.21, while achieving the lowest during the trading session at 109.92.

We have followed on from the Japanese economy the release of the current account index reading, which showed the surplus has shrunk to 1.437 billion yen compared to 1,817 billion yen last October, outperforming expectations that indicated a surplus of 1.425 billion yen, while the seasonally adjusted reading of the index The same widened the surplus to 1.795 billion yen from 1.732 billion yen in October, also outperforming forecasts that the surplus widened to 1,786 billion yen.

This came in conjunction with the issuance of the annual reading of the bank lending index, which reflected the slowdown in growth to 1.8% compared to the previous reading last November and expectations at 2.1%, to the disclosure of the ECO Watchers statistical reading of the current conditions, which showed the contraction of the current conditions shrank to 39.8 against 39.4 in November, worse than expected, to shrink the contraction to 40.9.

On the other hand, investors are looking for the US economy to disclose inflation data with the release of the consumer price index, which may reflect a slowdown in growth to 0.2% against 0.3% last November, while a substantial reading of the same indicator may show stability in growth of 0.2%, While the annual reading of the index may indicate accelerated growth to 2.4% versus 2.1%, the fundamental annual reading of the index may reflect the stability of growth at 2.3%.

This comes before the speech of the Federal Open Market Committee member and President of the New York Federal Reserve John Williams about the culture of financial services in a workshop hosted by the London School of Economics, and it is expected that tomorrow, Wednesday, the PPI reading, which is an indicative indicator of inflation, will be issued before members Others on the Federal Committee are Philadelphia Fed President Patrick Harker and Dallas Federal Reserve Chairman Robert Kaplan.

Tomorrow's Big Book report is also scheduled to be revealed tomorrow, whose importance is that it is issued two weeks before the FOMC meeting, which is one of the pillars upon which the Federal Reserve monetary policy makers build their decisions and orientations to support and stimulate the American economy, knowing that The next meeting of the Federal Open Market Committee will be held in Washington on January 28/29.

Other than that, US Trade Representative Robert Lighthiser yesterday told Fox Business that the Chinese translation of the text of the 86-page deal had been completed, with his statement, "We will announce it Wednesday before signing," and this came hours after Liu He, the Chinese prime minister, arrived. The head of the Chinese negotiating team in Washington trade talks is on the verge of signing tomorrow, Wednesday, the first phase of the trade deal between the United States and China.

It is reported that the US Treasury yesterday removed China from the currency manipulation list after it was put on the list by the ministry in August with the postponement of that order because Beijing remained artificially weaker on the yuan, and the Treasury Department reported through its semi-annual report of the currency China has made "enforceable commitments" to spread exchange rate information and not to depreciate the yuan.

Technical analysis

Yesterday the dollar against the yen resumed its positive trading to approach our awaited target at 110.50, and the price gets good positive support from the EMA50, which provides signals on the price trend to breach the mentioned level and open the way for more gains.

In general, we will continue to favor the bullish trend for the next period unless 109.33 level is broken and stability below it.

The expected trading range for today is between 109.50 support and 110.80 resistance.

Expected trend for today: bullish.