USDJPY analysis 28.01.2020

The US dollar fluctuated in a narrow range tilted to the upside during the Asian session, to witness its bounce for the second session from the lowest since January 8 against the Japanese yen, following the developments and economic data that it had reported on the Japanese economy and on the cusp of developments and economic data expected today Tuesday by the US economy These include a recorded speech by the Federal Open Market Committee member and President of the New York Federal Reserve Bank John Williams and the launch of the FOMC meeting in Washington.

At exactly 06:08 AM GMT, the US dollar pair rose against the Japanese yen by 0.13% to 109.04 levels compared to the opening levels at 108.90, after achieving its highest level during the trading session at 109.05, while achieving the lowest at 108.82.

On the Japanese economy, we followed the disclosure of inflation data with the release of the annual services price index, which showed stable growth at 2.1%, unchanged from the previous reading in November, in line with expectations, and this came before we witnessed the Bank of Japan’s disclosure of The core annual CPI reading, which showed acceleration in growth to 0.3% compared to the previous reading in November and expectations at 0.2%.

On the level, investors are currently watching by the US economy to disclose the reading of the durable goods orders index, which represents about half of consumer spending, which represents more than two-thirds of the gross domestic product in the United States, which may reflect a rise of 1.2% compared to a decline of 2.1% in November In the past, the core reading of the same index may also show a 0.4% increase compared to a 0.1% decline in November.

This comes before we witness the disclosure of the US housing market data with the release of the seasonally adjusted reading of the S&P composite of house prices 20 which may reflect slowing growth to 0.3% compared to 0.43% in the previous monthly reading last October, while the reading may appear Annual growth in the same index accelerated to 2.5%, compared to 2.2% in October.

Up to the Federal Reserve Board member and President of the New York Federal Reserve John Williams made the opening remarks on the Puerto Rico Beach program in San Juan, via a pre-recorded video, before revealing the reading of the consumer confidence index, which may appear widening to 128.2 compared to 126.5 in December, and the Richmond Industrial Index reading, which may reflect a contraction of 3 to 5 in December.

This comes in conjunction with the start of the FOMC meeting today and tomorrow, Wednesday, in Washington, in which it is expected that the short-term benchmark interest rates for the third consecutive meeting will be maintained between 1.50% and 1.75%, and look forward to the press conference’s activities. Federal Reserve Governor Jerome Powell tomorrow, Wednesday, half an hour after the FOMC meeting ends.

Markets are also looking after tomorrow, Thursday, to disclose the preliminary reading of the gross domestic product of the United States for the fourth quarter, which may show the acceleration of the pace of growth for the largest economy in the world to 2.2% compared to 2.1% in the third quarter, while the initial reading may reflect the GDP measured in prices from Last quarter, the pace of growth stabilized at 1.8%, little changed from what it was in the third quarter.

Technical analysis

The dollar versus the yen maintains its stability below 109.33, to keep the negative pressure in place for the upcoming period, which mainly targets testing the 108.40 level.

We recall that opportunities are available to rebound upwards after testing the mentioned level to resume the main bullish trend, noting that a break of 109.33 will stop the expected decline and lead the price to restore the bullish path again, while a break of 108.40 is a negative factor that will force the price to achieve further decline in the short and intraday basis.

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

Expected trend for today: bearish.