USDJPY analysis 21.01.2020

The US dollar fell during the Asian session to witness its bounce for the second session in three sessions from its highest since May 23 against the Japanese yen after the developments and economic data that we announced today Monday about the Japanese economy amid the scarcity of economic data at the beginning of this week by the American economy and with the growing Anxiety over a new strain of pneumonia in China has led to risk aversion on the market.

At exactly 05:57 am GMT, the US dollar pair fell against the Japanese yen by 0.21% to 109.95 levels compared to the opening levels at 110.18, after achieving the lowest level during the trading session at 109.90, while achieving the highest at 110.22.

We have followed the monetary policy makers ’decision with the Japanese Central Bank to keep negative interest rates at 0.10%, which came in line with expectations, with the disclosure of the Bank of Japan’s monetary policy statement, which reflected the Japanese central bank’s provision of more flexibility in monetary policy and raised its expectations for growth For the first time in a year, attention is now drawn to the events of the press conference that Bank of Japan Governor Haruhiko Kuroda will hold in Tokyo.

It is noteworthy that the Governor of the Central Bank of Japan Kuroda Noh last Wednesday during the Japanese Businessmen Union meeting in Tokyo / because the Bank of Japan will continue to expand its monetary base until the inflation rate in his country exceeds the rate of two percent, while expressing that the Japanese economy is expanding moderately and its approach to being an indicator Consumer price is about 0.5%,

In another context, we would like to point out that the Japanese government last month raised its growth forecasts for the next fiscal year 2020/2021, which begins with the beginning of next April, to 1.4% compared to its previous forecasts last July with a growth of 1.2%, while maintaining its expectations for growth during the year The current fiscal, which expires at the end of next March at 0.9%, comes in the wake of the Japanese government's recent approval of a $ 122 billion financial package.

Otherwise, the spread of a pneumonia-like virus in China led to a sudden bout of risk aversion in the markets and prompted investors to transfer liquidity to safe havens, including the Japanese yen, especially after a Chinese health expert stated that the virus could be transmitted from person to person, after emphasizing Four cases have died from the disease, which has sparked concern that it is spreading on the eve of the Lunar New Year holiday in China.

Technical analysis

The dollar versus yen pair offers slight negative trades with the opening of the day to test SMA 50, but since the price is above 109.33, our bullish expectations will remain effective for the coming period, with a reminder that our awaited targets start at 110.50 and extend to 111.50 after breaching the previous level.

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

Expected trend for today: bullish.