USDJPY analysis 29.01.2020

The US dollar fluctuated in a narrow range slanting back down during the Asian session, to witness its bounce to the seventh session in nine sessions from the top since May 23 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 Wednesday by The American economy, which includes the decisions and trends of monetary policy makers at the Federal Reserve and the Federal Reserve Governor Jerome Powell's press conference in Washington.

At exactly 05:58 am GMT, the US dollar pair fell against the Japanese yen by 0.01% to 109.14 levels compared to the opening levels at 109.15, after achieving the lowest level during the trading session at 109.08, while achieving the highest at 109.27.

We have followed about the Japanese economy, the second largest economy in Asia and the third largest economy in the world after each of the United States and China, the Bank of Japan revealed a summary of opinions report, before we witness the release of the consumer confidence index, which showed stability at a value of 39.1 without any significant change from What it was in the previous reading last December, contrary to expectations that it rose to 39.6.

On the other hand, investors are anticipating by the US economy to disclose data for the month of December with the release of the merchandise trade balance reading, which may explain the widening deficit to $ 64.5 billion compared to $ 63.2 billion in conjunction with the release of the initial reading of the wholesale inventory index, which may reflect a rise of 0.1 % Versus a decline of 0.1%, all the way to revealing housing market data with the release of existing home sales, which may show a slowdown in growth to 0.5% versus 1.2%.

This comes in conjunction with the FOMC meeting, on January 28-29, during 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. To be held by Powell Fed Governor half an hour after the FOMC meeting’s activities expire.

We would like to point out that US President Donald Trump just renewed his demand for the Federal Reserve to resume reducing interest on federal funds during its current meeting, in order to maintain interest rates in America compared to other countries, with his statement that if the Federal Reserve decides to cut rates The short-term reference interest is that his country will focus on paying its debts and refinancing it again.

Technical analysis

The dollar versus yen pair shows some bullish tendency to approach the test of 109.33 level, in conjunction with the stochastic loss of positive momentum and its entering overbought areas, noting that SMA 50 meets with the mentioned resistance to add more strength to it.

Consequently, we believe that opportunities exist to rebound downward and resume the expected bearish direction over the intraday basis, whose next target is at 108.40, while stability below 109.33 is important for the continuation of the suggested decline.

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

Expected trend for today: bearish.