USDJPY analysis 27.01.2020

The US dollar fluctuated in a narrow range tilted to the upside during the Asian session to witness its bounce from the lowest since January 8th, when it tested the lowest since October 10 against the Japanese yen amid the scarcity of economic data by the Japanese economy at the beginning of this. The week is on the cusp of developments and economic data expected today Monday by the US economy, which includes a recorded speech by the member of the Federal Open Market Committee and President of the New York Federal Reserve John Williams, and in the shadow of concern over the spread of the Corona virus.

At exactly 05:57 AM GMT, the US dollar pair rose against the Japanese yen by 0.05% to 109.07 levels, compared to the opening levels at 109.02, after achieving its highest level during the trading session at 109.12, while achieving the lowest in three weeks at 108.73.

Investors are currently awaiting the presentation of a member of the Federal Committee and President of the New York Federal Reserve Bank John Williams opening remarks in the Puerto Rico Beach program in San Juan, via a pre-recorded video, before we witness the disclosure of the US housing market data with the release of the New Home Sales Index, which may It shows that the growth accelerated to 1.6% or about 731 thousand homes, compared to 1.3% at about 719 thousand homes last November.

This comes hours before the disclosure tomorrow, Tuesday, of the Durable Goods Orders reading, which represents about half of the consumer spending that represents more than two thirds of the gross domestic product in the United States, which may reflect a rise after its decline in November, before the release of a confidence index reading Consumers for the current month, which may reflect a widening from what it was in December.

Up to the start of the activities of the Federal Open Market Committee meeting on January 28-29 in Washington, which is expected to maintain the short-term benchmark interest rates for the third consecutive meeting at between 1.50% and 1.75%, before the press conference to be held. Federal Reserve Governor Jerome Powell half an hour after the FOMC meeting meeting expires on Wednesday.

After that, next Thursday, the markets are looking to reveal the initial reading of the United States’s GDP for the fourth quarter, which may show the fastest growth of the largest economy in the world to 2.2% compared to 2.1% in the third quarter, while the initial reading of the measured GDP may reflect Prices for the last quarter quarter stabilized at a pace of 1.8%, little changed from what it was in the third quarter.

Other than that, we followed yesterday, Sunday, the Chinese National Health Committee reported that the ability of the coronavirus to spread is getting stronger and that the infection may continue to rise, explaining that there are more than 2,700 confirmed cases of the disease and more than 80 deaths from the deadly virus so far in China This came hours after Chinese President Xi Jinping last Saturday ordered a faster response, and teams have been dispatched to heavily affected areas to enhance prevention and containment.

In the same context, China announced that it will extend the duration of the Lunar New Year holidays that started last Saturday to ten days from a week, specifically until the second of next February, and that schools and universities will return to resume their educational activities from the holidays later than usual, while it announced a city China-ruled Hong Kong will ban entry to people who visited Hubei Province in the past two weeks.

It is reported that the World Health Organization last week considered the Coronavirus, which started in Wuhan, China, as an "emergency in China", after initially expressing that "it is too early to consider this event as a public health emergency of international concern", so that it remains of Before the organization is limited to China and not at the world level, knowing that Canada confirmed its first case, and America announced yesterday the fifth case, and the spread of the virus in more than 15 countries.

Technic al analysis

The dollar versus the yen made a clear break of 109.33 and settled below it, which puts the price under expected negative pressure over the intraday basis, mainly on its way to test the 108.40 level.

We point out the importance of monitoring the price when the mentioned level is reached, as its steadfastness against the negative pressure will push the price to resume trading within the bullish channel that appears in the image, heading towards achieving positive goals that start at 109.33 then 110.50, while breaking it will pressure the price to incur more losses and target the 107.45 level As a next negative station.

The expected trading range for today is between 108.40 support and 109.70 resistance.

Expected trend for today: bearish.