USDJPY analysis 05.03.2020

The fluctuation of the US dollar in a narrow range slanted toward decline during the Asian session, to witness its rebound to the seventh session in eleven sessions of its sessions since April 25 of 2019 against the Japanese yen amid the scarcity of economic data by the Japanese economy and on the eve of developments and economic data expected Today, Thursday is the US economy which includes the talk of Federal Reserve Board member and Dallas Federal Reserve Chairman Robert Kaplan.

At exactly 6:20 am GMT, the US dollar pair fell against the Japanese yen by 0.17% to 107.35 levels compared to the opening levels at 107.53, after the pair achieved its lowest level during the trading session at 107.26, while achieving the highest at 107.74.

Investors are currently awaiting by the American economy the disclosure of the final reading of the productivity index and the cost of one work, and it is expected that the productivity index reading will show stability of growth at 1.4%, little changed from what it was in the initial reading for the fourth quarter and against a 0.2% contraction in the previous reading of the quarter Third, while the cost index reading may show an acceleration of growth to 1.5% compared to 1.4% in the initial reading and against a growth of 2.5% in the third quarter.

This comes in conjunction with the disclosure by the largest industrialized country in the world of a reading of the factory orders index, which may reflect a 0.2% decline compared to a rise of 1.8% in December, and with the release of the aid requests index for the past week at the end of last month, which may reflect a decrease by 4 thousand requests to 215 thousand requests compared to 219 thousand requests in the previous weekly reading.

This also comes in conjunction with the release of the last-day claims filing for the last week on February 22, which may reflect a rise of one thousand applications to 1,725 ​​thousand applications compared to 1,724 thousand requests in the previous weekly reading, up to the speech of a member of the Federal Committee and President of Dallas Bank Federal Reserve Robert Kaplan On trade wars, the global economic slowdown and monetary policy at the Chicago Council on World Affairs.

It is noteworthy that the Federal Reserve held a surprising meeting last Tuesday through which the members of the Federal Open Market Committee decided to reduce the interest on federal funds by 50 basis points to between 1.00% and 1.25% after fixing them in the previous two meetings of the Federal Reserve at between 1.50% and 1. 75%, and after reducing it three times by 25 basis points in previous meetings last year.

In the same vein, we also followed up on Tuesday, the press conference held by Federal Reserve Governor Jerome Powell after the decision to suddenly reduce markets to short-term benchmark interest rates, through which he noted that the decision came to support the American economy, while touching that over the past years wages increased and improved The labor market and that the committee has repeatedly stressed that the current monetary policy is appropriate.

Powell also noted at the time that several risks arose and the current situation became in a state of uncertainty, which made the Federal Committee see the existence of fundamental changes that prompted it to take a reaction, adding that over the course of the months and weeks ahead, the committee will work to monitor markets and developments and take appropriate decisions to support the economy He explained that the American economy is strong, but it is difficult to determine the extent of the negative effects of the spread of the Corona virus locally and globally.

Powell stressed during the press conference that the committee’s decision to cut interest at Tariq’s meeting for the first time since the global financial crisis that occurred more than a decade ago and by 50 basis points, which is rarely made by the Federal Reserve, is not a political decision but rather stems from a vision The Federal Committee for Current Events, and this came after US President Donald Trump repeatedly asked the Federal Reserve and Powell County to cut interest and expand stimulus.

Technical analysis

The dollar versus the yen has been hovering around 107.42 since yesterday, and we notice that the stochastic is providing a negative cross signal now, waiting for the price to stimulate the resumption of the expected bearish direction in the intraday and short term, which targets the level of 106.28 as the next main station.

Therefore, we will continue to favor the bearish trend for the next period provided that the price maintains its stability below 108.34, noting that the EMA50 continues to support the expected descending wave.

The expected trading range for today is between 106.50 support and 108.00 resistance.

Expected trend for today: bearish.