USDJPY analysis 28.02.2020

The US dollar fell during the Asian session to witness its bounce back to the fifth session in seven sessions from the top since April 25, 2019 against the Japanese yen after the developments and economic data that were reported by the Japanese economy and on the cusp of developments and economic data expected on Friday by the American economy and in the shadow of an assessment Markets to spread Corona virus outside China, which could make it a global pandemic.

At exactly 6:10 am GMT, the US dollar pair fell against the Japanese yen by 0.64% to 108.89 levels compared to the opening levels at 109.59, after the pair achieved its lowest level since the fourth of February at 109.97, while it achieved its highest during The session trades at 109.68.

On the Japanese economy, we have followed the release of the annual reading of the Tokyo CPI, which showed that growth slowed to 0.4% compared to 0.6% in the previous annual reading of last January, worse than expectations at 0.5%, as indicated by the fundamental annual reading of the same index, which excludes Including fresh food, growth slowed to 0.5% from 0.5% in January, also worse than forecasts at 0.6%.

This came in conjunction with the unemployment rate index reading up to 2.4% compared to the previous reading for December and expectations at 2.2%, and before we witness the seasonally adjusted reading of the retail sales index, growth accelerated to 0.6% compared to 0.2% last December. Contrary to expectations, which indicated a 0.1% decline, while the annual reading of the same index showed the decline decreased to 0.4% compared to 2.6%, surpassing expectations for a 1.3% decline.

We also followed about the third largest economy in the world and the third largest industrialized country globally, revealing data of the industrial sector with the release of the first reading of industrial production, which showed slowing growth to 0.8% compared to 1.2% in December, outperforming expectations that indicated slowing growth to 0.2% , While the annual reading of the same indicator showed that the decline decreased to 2.5% compared to the previous annual reading and expectations at 3.1%.

Up to the disclosure of housing market data with the release of the annual reading of the index of start-up housing, which showed that the decline widened to 10.1% compared to 7.9% in December, contrary to expectations that the decline will decrease to 5.8%. Otherwise, we followed yesterday, according to the Japanese Prime Minister. Shinzo Abe says his government will require schools in all levels of education to close its doors from March 2 to the end of the spring break, that is, until the end of the month.

This came hours after Japanese Prime Minister Abe asked on Wednesday to postpone any sports or cultural gatherings for two weeks with the aim of contributing to containing the spread of the Corona virus, and he also noted at the time that his country's economy was recovering well and that his government was closely monitoring developments related to the virus on the Japanese economy, with He mentioned that the government is monitoring market movements and is ready to intervene, adding that it is not possible to comment on recent market movements.

Japanese Prime Minister Abe also noted Wednesday that his government continues to communicate with the International Olympic Committee to follow up on preparations for the Chinese Olympic Games in Tokyo 2020, and this came in conjunction with the report that a member of the International Olympic Committee stated that it is possible to cancel the Tokyo Olympics due to concerns Of the outbreak of the Corona virus, adding that if the seriousness of the Olympics is confirmed, the organizers will most likely go to their cancellation.

On the other hand, investors are awaiting by the US economy, the largest economy in the world, the release of the merchandise trade balance index, which may explain the widening of the deficit to $ 68.5 billion compared to $ 68.3 billion in December, in conjunction with the release of the initial reading of the wholesale inventory index That may reflect a 0.1% rise versus a 0.1% fall in December.

This comes in conjunction with the disclosure of spending and personal income data, which may reflect the stability of personal spending growth at 0.3%, little changed from the previous reading in December, and personal income growth accelerated to 0.3% compared to 0.2% in December, while it may A reading of the core personal consumption expenditures index shows the stability of the pace of growth in January at 0.2%.

Markets are also looking to the largest industrialized country in the world to reveal industrial sector data with the release of the Chicago PMI reading, which may reflect a contraction contraction of 46.1 compared to 42.9 in January, to reveal the final reading of the University of Michigan's consumer confidence index, which Shrinkage widening may appear to 100.7 versus 100.9 in the first preliminary reading of the current month and versus 99.8 in January.

Other than that, South Korea announced a short time ago that the number of cases infected with Corona virus increased to more than 2,000 cases and Italy announced more than 600 cases, and this came in conjunction with the examination of the state of California, USA, for 8,400 people looking for signs of the virus after they traveled to Asia recently, Meanwhile, Saudi Arabia has suspended religious visits that attract millions to it.

We would like to point out that the Director-General of the World Health Organization, Tidros Adhanum Gebresus, noted on Thursday that the spread of the Corona virus outside China has become a greater source of concern for the organization about the spread of the disease inside the Chinese borders, pointing out that for the second day in a row new cases of coronavirus were registered outside China in numbers The largest number of infected cases reported in China.

The Director-General of the World Health Organization, Gebrissos, also stated that the organization announced in the last twenty-four hours about 7 new countries that recorded the first cases of HIV infection, bringing the total number of countries that announced the emergence of cases to about 44 countries, bringing the total cases of coronavirus outside China has nearly 3,500 cases, and more than 55 people have died.

It is reported that Gebresus expressed at the weekend that the outbreak of the Corona virus can still be contained and that the virus is not out of control, especially with the death toll not significantly increasing, explaining that it is too early to describe its spread as a global epidemic, stressing that it is inappropriate to use this description Currently, it should focus on efforts to contain it, despite the possibility of it turning into a serious pandemic.

Technical analysis

The dollar against the yen succeeded in achieving our awaited target at 109.24 and begins today with further decline to attack this level and break it and try to stabilize below it, indicating the price trend to achieve more decline during the upcoming sessions, paving the way for more downward correction for the larger bullish wave, which started From the regions of 104.45.

Consequently, we expect a further decline today, and the next target is at 108.34, taking into consideration that a break of 109.25 will stop the negative scenario and lead the price to resume trading inside the bullish channel that appears in the picture and the trend to achieve positive goals starting at 110.40.

The expected trading range for today is between 108.34 support and 109.70 resistance

Expected trend for today: bearish