USDJPY analysis 19.02.2020

The US dollar fluctuated in a narrow range tilted to the upside during the Asian session, to witness its highest level since February 12, when it experienced its highest level since January 21 against the Japanese yen following the developments and economic data that it reported on the Japanese economy and on the cusp of developments and economic data. Expected today, Wednesday, by the US economy, which includes the speech of members of the Federal Open Market Committee and the disclosure of the minutes of the Federal Reserve meeting.

At 05:52 am GMT, the US dollar pair rose against the Japanese yen by 0.16% to 110.05 levels compared to the opening levels at 109.87, after the pair achieved its highest level in a week at 110.11, while it achieved its lowest during the trading session at 109.85.

On the Japanese economy, we have followed the release of the Trade Balance Index reading, which showed that the deficit widened to 1,313 billion yen compared to 155 billion yen last December, contrary to expectations that the deficit widened to 1,685 billion yen, as the seasonally adjusted reading of the same indicator showed The deficit widened to 224 billion yen from 107 billion yen in December, also contrary to expectations that the deficit widened to 550 billion yen.

This came with the annual reading of both exports and imports showing a decline in January, and in conjunction with the disclosure of a reading of the machinery orders index, which showed a 12.5% ​​decline compared to an increase of 18.0% last November, worse than the expectations that indicated a 9.0% decline Also, the annual reading of the same index showed a decline of 3.5% against a rise of 5.3%, also worse than expectations that indicated a decline of 1.3%.

On the other hand, investors are currently awaiting by the US economy the disclosure of the producer price index reading, which is an initial indicator of inflation, which may reflect the stability of growth at 0.1% compared to during December, while the fundamental reading of the same indicator may show acceleration of growth to 0.2% against 0.1%,

This also comes in conjunction with the disclosure of housing market data, with the release of both the beginning construction index and the building permit index, and amid expectations that the reading of the building permits index will reflect a 2.1% increase to about 1,450 thousand permits compared to a decline of 3.9% at 1,416 thousand permits in December / December, while the reading of the index of start-up homes, may reflect a decline of 12.0% to about 1,415 thousand homes compared to a rise of 16.9% at 1,608 thousand homes.

Reaching the upcoming event today, the Federal Reserve revealed the minutes of the Federal Open Market Committee meeting held on January 28-29, in which the Federal Reserve monetary policy makers decided to keep interest rates on federal funds at between 1.50% And 1.75% for the third consecutive meeting at the time.

Technical analysis

The dollar against the yen pair resumes its positive trades to test the 110.00 barrier, reinforcing expectations of the continuation of the expected bullish trend over the intraday basis, pending a visit to the 110.50 level which represents our first positive target, with a reminder that exceeding this level will push the price to 111.50 as the next station.

SMA 50 continues to support the suggested bullish wave, which will remain valid and active unless 109.33 level is broken and stability below it.

The expected trading range for today is between 109.50 support and 110.80 resistance

Expected trend for today: bullish