USDJPY analysis 08.04.2020

The US dollar fluctuated in a narrow range tilted to the upside during the Asian session, to witness its bounce for the fourth session in six sessions from the lowest since March 18 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 Wednesday from Before the American economy, the largest economy in the world.

At exactly 05:51 am GMT, the US dollar pair rose against the Japanese yen by 0.13% to 108.90 levels compared to the opening levels at 108.76, after the pair achieved its highest level during the trading session at 109.00, while achieving the lowest at 108.51.

We have followed about the Japanese economy, the third largest economy in the world and the third largest industrialized country in the world, to reveal the reading of the machinery orders index, which showed a slowdown in growth to 2.3% compared to 2.9% last January, exceeding expectations that indicated a decline of 2.9%, while The annual reading of the same index showed that the decline widened to 2.4% against 0.3%, also outperforming expectations that indicated a decline of 3.0%.

This came in conjunction with the release of the current account reading, which showed that the surplus widened to 3,169 billion yen compared to 612 billion yen in January, outperforming expectations that the surplus widened to 3,067 billion yen, as the seasonally adjusted reading of the same indicator showed that the surplus widened to What is worth 2,378 billion yen compared to 1,627 billion yen, also better than expectations that the surplus will widen to 2,025 billion yen.

Up to the Japanese Cabinet Office's disclosure of the ECO Watchers statistic reading of the current and future conditions, which showed that the current conditions contraction widened to 14.2 compared to 27.4 last February, worse than the expectations that indicated the expansion of deflation to 22.2, as the reading of future conditions showed that the contraction expanded At 18.8 versus 24.6, it was also worse than expected at 20.0.

It is reported that Japanese Prime Minister Shinzo Abe announced yesterday the state of emergency in the Japanese capital Tokyo and in Osaka in addition to five other cities, explaining that seven cities will be subject to the state of emergency for a month, with his statement that his government will work to ensure the continuation of economic activity as possible and that it is working at the time Currently, the approval of a stimulus package of 108 trillion yen ($ 990 billion).

On the other hand, investors are currently watching the US economy. The Federal Reserve revealed the minutes of the Federal Open Market Committee meeting that took place on March 15th, that surprising meeting, which was the second in less than two weeks after the previous sudden meeting on the third of the same month, which It was recognized that short-term benchmark interest rates would be returned to zero levels.

The members of the Federal Open Market Committee reduced the interest on federal funds at the time by 100 basis points to between zero levels and 0.25%, which remained since 2008 until the meeting of 27-28 October 2015, after reducing them in the previous emergency meeting by 50 points The basis is between 1.50% and 1.75%, and this comes in the wake of the committee members cutting interest three times by 25 basis points in previous meetings last year.

The Federal Reserve's monetary policy statement stated at the time that the reduction decision is from March 16, and that the Federal Open Market Committee will undertake repurchases of treasury bonds with at least $ 500 billion per month and mortgage-backed securities of at least $ 200 billion per month, at least. These purchases are made at the appropriate speed to support the smooth performance of the stock market, treasury and mortgage agency.

Technical analysis

The dollar versus yen is testing the moving average 50, which is an intraday support at 108.60 now, awaiting the breach of this level to confirm the continuation of the expected descending wave for the coming period, which aims at the level of 107.68 as a first station.

The stochastic oscillator reaches overbought areas to support the chances of achieving the required break, so we will continue to suggest the bearish direction over the intraday and short term unless the price rushes to breach the 109.20 level and stability above it.

The expected trading range for today is between 107.70 support and 109.50 resistance.

Expected trend for today: Overall decline.