USDJPY analysis 10.02.2020

The US dollar fluctuated in a narrow range slanting back down during the Asian session to witness its bounce for the second consecutive session from the top since January 22 against the Japanese yen after the developments and economic data that it had reported on the Japanese economy and on the cusp of the speech of members of the Federal Open Market Committee both Deputy Governor of the Federal Reserve Michael Bowman in Florida and President of the Philadelphia Federal Reserve Patrick Harker at the University of Delaware, amid the scarcity of economic data today by the US economy, the largest economy in the world.

At exactly 06:02 am GMT, the US dollar pair fell against the Japanese yen by 0.03% to 109.77 levels compared to the opening levels at 109.80, after the pair achieved its lowest level during the trading session at 109.56, while the pair achieved its highest at 109.88, with Knowing that the pair started the trading session on an upward price gap after it concluded the trading last week at 109.75 levels.

On the Japanese economy, we have followed the release of the current account index reading, which showed the surplus narrowed to 524 billion yen compared to 1.437 billion yen in November, outperforming expectations that indicated a surplus of 465 billion yen, as seasonally adjusted reading of the same indicator showed that the surplus has shrunk to 1.715 billion yen against 1.795 billion yen, also ahead of expectations that indicated a surplus of 1,677 billion yen, and this came in conjunction with the release of the annual reading of the bank lending index, which reflected the acceleration of growth to 1.9% compared to 1.8% in December, contrary to expectations at 1.7 %.

On the other hand, investors are currently awaiting what will come out of the FOMC talk, with Federal Reserve Deputy Governor Michael Bowman later in the day delivering a speech titled "Empowering Community Banks" at the American Bankers Association for Community Banks in Florida, before To see Philadelphia Fed President Patrick Harker speak about the economic outlook at the University of Delaware.

This comes hours before the launch of the activities of the semi-annual testimony of the Federal Reserve Governor Jerome Powell before the US Congress, where it is expected that Powell will deliver tomorrow, Tuesday, the first half of his half-year testimony about monetary policy before the Financial Services Committee in the House of Representatives, before he makes the day after tomorrow In the second half of his semi-annual testimony about monetary policy before the Senate Banking Committee.

Technical analysis

The dollar yen pair has been showing sideways and narrow range trading recently, and we notice that the stochastic is beginning to provide positive signals now, waiting for the price to stimulate the resumption of the bullish bias, which aims to test the 110.50 level initially.

From here, we continue to favor the bullish trend unless 109.33 level is broken and stability below it, noting that exceeding the mentioned target will push the price to 111.50 as the next main station.

The expected trading range for today is between 109.30 support and 110.50 resistance.

Expected trend for today: bullish.