USDJPY analysis 06.02.2020

The US dollar fluctuated in a narrow range tilted to the upside during the Asian session to witness its bounce to the fifth session from the lowest since January 8, when it tested the lowest since October 10 against the Japanese yen amid the scarcity of economic data by the Japanese economy and on The expected economic developments and data on Thursday by the US economy and in the shadow of market assessments of efforts to contain and combat the Corona virus.

At 05:54 am GMT, the US dollar pair rose against the Japanese yen by 0.12% to 109.96 levels compared to the opening levels at 109.82, after the pair achieved its highest level since January 22, while the pair achieved the lowest during trading The session is at 109.74.

Investors are currently looking to the US economy to disclose the initial reading of the single labor cost index, which reflects the slowdown in growth to 1.3% compared to 2.5% in the third quarter, while the initial reading of the productivity of sectors other than agriculture may show a rise of 1.6% against a decline of 0.2% in the third quarter, This coincides with the issuance of the weekly reading of the benefit claims index, which may show a decrease of 1 thousand applications to 215 thousand applications.

Other than that, yesterday we followed the unconfirmed report that a team at Zhejiang University in China found a drug to treat the Coronavirus that started in Wuhan and killed only 73 people yesterday, which is the highest daily rate of increase in deaths from the virus, bringing the total death toll 563 people according to the Chinese Health Authority, while 3,694 new cases of the deadly virus have been reported, bringing the total number of people infected globally to 28,018 cases.

We would like to point out that the WHO spokesman noted yesterday, Wednesday, that there is currently no effective treatment for cases of coronavirus infection. In another context, we also followed yesterday. The Chinese President expressed that the containment of the Corona virus is going through a very critical stage and that all measures must be implemented Correctly fight and prevent coronavirus, while stating that his country will work to combat rumors related to the spread of the virus.

It is noteworthy that the Director of the International Monetary Fund expressed last Tuesday that the fund supports the efforts of China, the second largest economy in the world and the second largest industrialized country globally, in an attempt to contain the Corona virus, explaining that the fund does not support only medical efforts, but also supports all economic and financial efforts adopted by the government Chinese, which aims to address the economic damage caused by the deadly coronavirus.

This comes in conjunction with the market assessment of the stimulus adopted by the People's Bank of China (the Central Bank of China) last Sunday, and in the wake of the report that recently touched on the fact that Beijing will ask Washington to be flexible with regard to its pledges agreed in the first stage of the trade agreement, given the expectations of the impact of the economy Chinese as a result of the spread of the coronavirus, in addition to the report that touched on the fact that the Chinese government intends to reduce its expectations for economic growth.

Technical analysis

The dollar versus the yen significantly resumed its positive trading to move away from the 109.33 level, which supports the continuation of our expectations for the upward trend during the upcoming sessions, which aims to test the 110.50 level initially, noting that exceeding this level will push the price to 111.50 as the next positive station.

Therefore, the bullish trend scenario will remain intact over the intraday basis, provided stability above 109.33.

The expected trading range for today is between 109.30 support and 110.70 resistance.

Expected trend for today: bullish.