USDJPY analysis 31.01.2020

The US dollar fluctuated in a narrow range tilted to the upside during the Asian session, to witness its bounce to the second session from the lowest since January 8, when it tested the lowest since October 10 against the Japanese yen after the developments and economic data that it followed on the Japanese economy. On the cusp of developments and economic data expected today, Friday, by the US economy, the largest economy in the world.

At exactly 06:08 AM GMT, the US dollar pair rose against the Japanese yen by 0.08% to 109.05 levels, compared to the opening levels at 108.96, after achieving its highest level during the trading session at 109.14, while achieving the lowest at 108.88.

On the Japanese economy, we followed the disclosure of inflation data with the release of the annual reading of the Tokyo consumer price index, which showed slowing growth to 0.6% compared to 0.9% last December, worse than expectations at 0.7%, as indicated by the fundamental annual reading of the same index, which Excluding fresh food, the growth slowed to 0.7% compared to the previous yearly reading and expectations at 0.8%.

This came in conjunction with the release of the unemployment rate index, which showed stability at 2.2% in December, contrary to expectations that indicated an increase to 2.3%, and before we witness the annual reading of the retail sales index showed a decline in 2.6% compared to 2.6% in November. / November, worse than expectations, which indicated a decline to 1.7%.

Up to the disclosure by the second largest economies of Asia and the third largest economy and industrialized country in the world of industrial sector data with the release of the first reading of industrial production, which showed a rise of 1.3% against a decline of 1.0% in November, exceeding expectations that indicated a rise of 0.7%, While the annual reading of the same index showed that the decline decreased to 3.0% compared to 8.2%, agreeing with expectations that indicated a decrease in the decline to 3.6%.

On the other hand, investors are currently awaiting by the US economy to disclose spending and personal income data, which may reflect a slowdown in personal spending growth to 0.3% versus 0.4% last November, and a slowdown in personal income growth to 0.3% compared to 0.5% in August November, while a reading of the core personal consumption expenditures index may show the stability of the pace of growth in December at 0.1%.

This comes in conjunction with the disclosure of the unit labor cost index reading, which may reflect the stability of growth at 0.7%, little changed from what it was in the third quarter, and before we witness the disclosure of industrial bottom data for the largest industrial country in the world with the release of the Chicago PMI reading Which may reflect the stability of the contraction at 48.9, little changed from last December.

To reveal the final reading of the University of Michigan's index of consumer confidence, which may show the stability of the expansion at 99.1 unchanged from the initial reading of the previous month this month and against 99.3 in December, and this comes hours after the Federal Open Market Committee meeting, which approved the monetary policy makers The Federal Reserve has cut interest rates for the third consecutive meeting by 25 basis points, between 1.50% and 1.75%.

Technical analysis

The dollar against the yen touched the support of the bullish channel and bounced up to approach the pivotal resistance 109.33, noting that SMA 50 continues to press negatively on the price, while the stochastic indicator is losing its positive momentum significantly.

Consequently, these factors encourage us to continue to suggest the bearish trend for the upcoming period, which initially targets 108.40, while noting that the expected expected decline requires stability below 109.33.

The expected trading range for today is between 108.40 support and 109.60 resistance.

Expected trend for today: bearish.