USDJPY analysis 25.02.2020

The US dollar fluctuated in a narrow range tilted to the upside during the Asian session against the Japanese yen following the developments and economic data that it followed on the Japanese economy and on the cusp of developments and economic data expected today by the American economy, the largest economy in the world, which includes the talk of members of the Federal Committee for the open market in the shadows Market assessment of the spread of Corona virus outside China, which could make it a global pandemic.

At exactly 05:58 AM GMT, the US dollar pair rose against the Japanese yen by 0.08% to 110.81 levels compared to the opening levels at 110.72, after the pair achieved its highest level during the trading session at 111.04, while achieving the lowest at 110.64.

On the Japanese economy, we followed the disclosure of inflation data with the release of the annual services price index, which showed an acceleration in the pace of growth to 2.3%, compared to the previous reading of last December and expectations at 2.1%. Otherwise, we followed up during the weekend The Bank of Japan reiterates that the Bank of Japan will not hesitate to take the necessary measures if necessary.

In the same context, the Governor of the Central Bank of Japan Kuroda also noted during the activities of the G20 meeting hosted by the capital of the Kingdom of Saudi Arabia, Riyadh, because there is no need at the moment to expand the stimulus, with his statement that the Bank of Japan is closely monitoring the developments of the Corona virus and that it did not occur. Changes in the growth outlook There are no fundamental changes in the currency market, adding that he does not expect a significant decline in his country's economy.

On the other hand, investors are currently waiting for the US economy to reveal the housing market data with the release of the house price index reading, which may show accelerated growth to 0.4% compared to 0.2% last November, and showed the annual reading of the S&P house price index as well Growth accelerated to 2.8%, compared to 2.6% in the prior annual reading for November.

This comes before we witness the speech of a member of the Federal Committee and Chairman of the Dallas Federal Reserve Bank Robert Kaplan at the Kansas City Real Estate Seminar, and before the release of the consumer confidence index, which may appear widening to 132.6 compared to 131.6 last January, in conjunction with the disclosure of industrial sector data from For the largest industrialized country in the world with the release of the Richmond Industrial Index reading, which may reflect the narrowing of the expansion to 10 compared to 20 in January.

Up to the talk of Fed member and Deputy Governor of the Federal Reserve Richard Clarda about the economic and political monetary expectations at the annual conference of the National Association for Business Policy in Washington, and this comes amid the aspiration to reveal, after tomorrow, Thursday, the initial reading of the United States GDP for the first quarter, which may appear The growth rate of the largest economy in the world accelerated to 2.2% compared to 2.1% in the fourth quarter.

On the other hand, we followed yesterday the Director-General of the World Health Organization expressed that it is still possible to contain the outbreak of the Corona virus and that the virus is not out of control and especially with the death toll not significantly increased, explaining that it is too early to describe its spread as a global epidemic, stressing that it is It is inappropriate to use this description now and that it should focus on efforts to contain it, despite the possibility of it turning into a serious pandemic.

It is noteworthy that the Director-General of the World Health Organization said last Thursday that the decrease in the number of cases infected with Coronavirus outside China "may not remain the same for a long time", and we followed during the weekend, the report that touched on Italy's cancellation of some public events, including the Venice Festival in addition to closing Turkey temporarily borders with Iran and in South Korea, Samsung Electronics closed its factory there due to the spread of the virus.

In the same vein, we have just followed the announcement of China about 508 new cases of coronavirus and that there are about 71 additional deaths as of February 24, bringing the total number of cases of the deadly virus in China to 77,658 confirmed cases and deaths about 2,663 Case, and that coincided with an increase in the number of people infected with the virus in South Korea, Japan, Italy and Iran which have the most infected cases in the Middle East.

Technical analysis

The dollar versus the yen achieved a strong breakout at the level of 111.30 to start a downward correction of the recent bullish wave. On the other hand, the price is heading to visit the upside channel support that appears in the image as a natural trading according to the trading rules inside the price channels after touching the resistance of the mentioned channel recently.

Thus, a bearish bias will be likely during the upcoming sessions, and breaking the 110.27 level will confirm opening the way towards heading towards 109.24 as the next main target, noting that breaching 111.30 will stop the current negative pressure and lead the price to resume the main bullish direction again.

The expected trading range for today is between 110.00 support and 111.30 resistance.

Expected trend for today: bearish.