USDJPY analysis 20.03.2020

The US dollar fell during the Asian session to witness its rebound from above since February 24 against the Japanese yen amid the scarcity of economic data by the Japanese economy due to the holiday of Spring Equinox Day in Japan and on the cusp of developments and economic data expected on Friday by the American economy and in the shadow of growing Fears of a global outbreak of the Coronavirus virus and investor's assessment of global stimulus to confront Corona affiliates in the global economy.

At exactly 05:30 AM GMT, the US dollar pair fell against the Japanese yen by 0.61% to 110.03 levels compared to the opening levels at 110.71, after the pair achieved its lowest level during the trading session at 109.78, while achieving the highest in three weeks at 111.36 .

Investors are awaiting the release of the housing market data by the US economy with the release of the Existing Home Sales Index, which may show a 0.9% increase to 5.50 million homes compared to a 1.3% decline at 5.46 million homes in January. Otherwise we followed yesterday the US President’s announcement Donald Trump yesterday that the Food and Drug Agency is testing a drug treated for malaria in the treatment of corona virus, adding that the initial results are promising.

This comes hours after the Federal Reserve announced that it will enter the commercial paper markets, which have been frozen in the midst of the economic turmoil, threatening businesses that need financing between today and the other, and the Federal Open Market Committee stated on Tuesday that it will establish a financing facilitation committee for commercial papers to support the cash flow of homes and businesses and that it has formed A special purpose vehicle for purchasing any securities of unsecured assets with $ 10 billion in support from the Treasury.

This came in the wake of the surprising meeting held by the Federal Reserve last Sunday, which is the second surprising meeting in less than two weeks after the previous surprising meeting in the third of this month in which the Federal Reserve monetary policy makers decided to return the short-term benchmark interest rates to levels. The zero reached in the wake of the worsening global financial crisis more than a decade ago.

The members of the Federal Open Market Committee reduced the interest on federal funds by 100 basis points to between zero levels and 0.25%, which they remained from 2008 until the meeting of 27-28 October 2015, after reducing them in the previous emergency meeting by 50 points. The basis is between 1.00% and 1.25%, and this comes in the wake of the committee members cutting interest three times by 25 basis points in previous meetings last year.

Technical analysis

The dollar against the yen continued its bullish rally to be able to touch our extended target at 111.25, noting that the price started to retreat downward from there, and according to the trading rules inside the price channels, the price is on its way to start a descending wave on the intraday and short term, targeting 107.46 then 105.05 initially .

Therefore, the downside direction will be expected for the coming period, taking into consideration that a break of 111.25 will stop the expected decline and lead the price to achieve more gains in the medium term.

The expected trading range for today is between 108.95 support and 111.00 resistance.

Expected trend for today: bearish.