USDJPY analysis 12.03.2020

The US dollar fell during the Asian session to witness the resumption of its rebound from above since April 25, 2019 for the eleventh session in sixteen sessions against the Japanese yen after the developments and economic data that it had reported on the Japanese economy and on the cusp of developments and economic data expected today Thursday by the American economy In the wake of US President Donald Trump's unsuccessful speech to calm investor concerns following the World Health Organization's announcement of a global pandemic virus.

At exactly 06:29 am GMT, the US dollar pair fell against the Japanese yen by 0.79% to 103.71 levels compared to the opening levels at 104.54, after the pair achieved its lowest level during the trading session at 103.09, while achieving the highest at 104.81.

We have followed up on the Japanese economy, the third largest industrialized country in the world, the Bank of Japan revealed the manufacturing business statistics, which showed that the deflation widened to 17.2 compared to 7.8 in the last fourth quarter, worse than the expectations that indicated the expansion of deflation to 10.2, as indicated by a statistical reading The business sector as a whole industry, the contraction widened to 10.1 versus 6.2 in the fourth quarter.

This came in conjunction with the disclosure of inflation data with the release of the producer price index, which is an initial indicator of inflationary pressures, which showed a 0.4% contraction versus 0.1% growth last January, worse than the expectations that indicated a 0.3% contraction, while the annual reading of the index showed The same slowing growth to 0.8% compared to 1.5% in the previous annual reading for the month of January, also worse than the expectations that indicated slowing growth to 1.1%.

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 a 0.1% contraction versus 0.5% growth last January, while a substantial reading of the same indicator may show a slowdown in growth to 0.1 % Versus 0.5%, and the annual reading of the same indicator may show a slowdown in growth to 1.8% versus 2.1%, while the substantial annual reading of the index may reflect stability at 1.7%.

This also comes in conjunction with the issuance of the index of subsidy requests for the last week on the seventh of this month, which may show an increase by two thousand requests to 218 thousand applications compared to 216 thousand requests in the previous weekly reading, as may read the reading of the index of subsidy requests continued for the last week on 29 of Last February, an increase of 4 thousand requests to 1,733 thousand requests compared to 1,729 thousand requests in the previous weekly reading.

Other than that, we have just followed the press conference held by US President Donald Trump, during which he announced the suspension of all travel to Europe and a number of incentive measures, which included urging Congress to agree to an unspecified procedure for salary tax exemptions, expressing his confidence that America will limit One of the dangers it might pose, but his speech did not give investors the confidence that the United States is tightening its grip on the virus.

In another context, we followed yesterday, US Treasury Secretary Stephen Manuchin expressed during his testimony about the budget proposed by the Trump administration for the fiscal year 2021/2022 before the Subcommittee on Foreign Operations and Related Programs in Washington, that public health is the highest priority for the US government In this budget, with reference to it being approved by Congress to allocate $ 8 billion to fight against Corona.

The US Secretary of Finance Manuchin also stated that the International Monetary Fund and the World Bank are committed to providing adequate financial support to tackle the Corona virus, while expressing the fact that the US government aims to provide liquidity and direct financing to small and medium-sized projects and that the fiscal stimulus package will coincide with the reduction of salary taxes, indicating that it will be pumped Hundreds of billions of dollars in the American economy coinciding with tax cuts.

It is reported that the World Health Organization announced yesterday that the Coruna virus is a global epidemic, and we have also followed up on the statements of the Director-General of the World Health Organization, Tedros Adhanum Ghebrysos, "We are very concerned about the spread, hidden danger, and worrying levels of inaction," adding, "We rang the alarm loudly and clearly." According to the most recent figures issued by the organization, the number of cases infected with the virus has increased to more than 118 thousand, and 4,292 people have died in 114 countries.

Technical analysis

The dollar pair against the yen opens today with a strong negative to move away from the 104.63 level, reinforcing the expectations of the continuation of the downside trend, whose next main objective is 100.25, noting that the SMA 50 continues to press negatively on the price to support the downside expectations.

On the other hand, it should be noted that a break of 104.63 will stop the expected decline and push the price to start recovery attempts targeting 105.40 then 106.70 initially.

The expected trading range for today is between 102.80 support and 104.60 resistance.

Expected trend for today: bearish.