USDJPY analysis 09.04.2020

The US dollar fluctuated in a narrow range tilted to the upside during the Asian session to witness its bounce to the fifth session in seven sessions from the lowest since March 18 against the Japanese yen after the speech of the Japanese Central Bank Governor Haruhiko Kuroda at the meeting of the directors of the BoJ branches in Tokyo and on the cusp of developments The economic data expected today by the US economy, which includes the speech of Federal Reserve Governor Jerome Powell at the Brookings Institution in Washington via satellite.

At exactly 05:50 am GMT, the US dollar pair rose against the Japanese yen by 0.09% to 108.93 levels compared to the opening levels at 108.83, after the pair achieved its highest level during the trading session at 109.06, while achieving the lowest at 108.82.

We have followed a short while ago, the Governor of the Bank of Japan, Haruhiko Kuroda, expressed at the meeting of the directors of the Bank of Japan’s branches in Tokyo that the Bank of Japan will not hesitate to expand facilitation if necessary, with his consideration of the fact that economic ambiguity is very high, and that epidemics have a serious impact on the Japanese economy. He pointed out that the outbreak of the Corona virus has a severe impact on his country's economy through exports, outputs, domestic tourism in addition to stagnant consumption.

It is reported that Japanese Prime Minister Shinzo Abe declared last Tuesday a 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 in At the moment, a stimulus package of 108 trillion yen ($ 990 billion) has been approved.

On the other hand, investors are currently looking to the US economy for the publication of the index of subsidy requests for the past week on the fourth of April, which may reflect a decline of 1,648 thousand applications to 5,000 thousand requests compared to 6,648 thousand requests in the previous weekly reading, and this comes in conjunction with the disclosure On reading the PPI, which is an initial indicator of inflation, which may reflect the contraction in contraction to 0.3% compared to 0.6% last February.

In the same context, the core PPI reading may show stability at zero levels versus a 0.3% contraction in the previous reading in February, while the annual PPI reading may show a slowdown in growth to 0.5% compared to 1.3% in the previous annual reading of February February, and the core annual reading of the same indicator may also reflect slowing growth to 1.2% from 1.4% in February.

This comes before we witness the disclosure of the preliminary reading of the University of Michigan index of consumer confidence, which may show a decrease to 75.0 compared to 89.1 in March, in conjunction with the release of the final reading of the wholesale inventory index, which may reflect the stability of the decline at 0.5% during January. Last January, also in conjunction with the anticipated speech by Federal Reserve Governor Jerome Powell about his country's satellite economy at the Brookings Institution.

It is noteworthy that the Federal Reserve revealed yesterday, Wednesday, the minutes of the Federal Open Market Committee meeting held on the 15th of March, that surprising meeting, which was the second in less than two weeks after the previous surprising meeting on the third of the same month, which approved the monetary policy makers at The Federal Reserve returns short-term benchmark interest rates 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 minutes of the meeting stated yesterday that the reduction decision is in effect 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, provided that Make these purchases at the appropriate speed to support the smooth performance of the stock market, treasury and mortgage market.

In another context, we followed yesterday, Trump expressed that he would like to open his country's economy through the "big bang", but the death toll from the outbreak of the coronavirus must be on the slope first, and it is stated that he announced in advance the extension of the quarantine in America until the end of this month to reduce From the spread of Corona, according to the latest figures issued by the World Health Organization, the number of cases has increased to nearly 1,357 thousand, and 79,385 people have died in 212 countries.

According to the latest developments in the global outbreak of the Corona virus, the Chinese city of Wuhan, where the coronary virus began appearing to last for more than two months, ended hopes that the deadly virus outbreak may have peaked, knowing that the European Union’s disease surveillance agency stated yesterday that the epidemic It still strikes and kills large numbers of people across the old continent.

Technical analysis

The narrow range dominates the trading of the dollar pair against the yen, which maintains its stability below 109.20 level, noting that the stochastic indicator starts providing a negative crossover on the daily time frame, which supports the chances of resuming the expected bearish direction in the intraday and short term, whose targets begin at 107.68 It extends to 106.44 after breaking the previous level.

On the other hand, it should be noted that a break of 109.20 will push the price to test 111.10 areas before any new attempt to decline.

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

Expected trend for today: Overall decline.