USDJPY analysis 23.04.2020

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 early April, when it tested the lowest since 18 March against the Japanese yen, after the economic data that it reported on the Japanese economy and on The expected economic developments and data today, Thursday, by the US economy, the largest economy in the world.

At exactly 05:55 AM GMT, the US dollar pair rose against the Japanese yen by 0.03% to 107.78 levels compared to the opening levels at 107.75 after the pair achieved its highest level during the trading session at 107.87, while achieving the lowest at 107.71.

We have followed the disclosure of the initial reading of the manufacturing PMI for this April by Markit about Japan, the second largest economy in Asia, the third largest in the world, and the third largest industrialized country in the world after both the United States and China, which showed that the contraction widened to a value of 43.7 Compared to 44.8 last March.

On the other hand, investors are currently awaiting by the American economy the release of the index of subsidy requests for the past week on April 18, which may reflect a decline by 895 thousand requests to 4,350 thousand requests compared to 5,245 thousand requests in the previous weekly reading, while it may appear reading requests The continuous benefit for the last week on the 11th of this month, increasing by 5,295 thousand requests to 17,271 thousand applications compared to 11,976 thousand requests.

This comes before we witness the revelation of the initial reading of the Markit Industrial and Service Purchasing Managers Index for the United States, which may reflect the widening contraction of the industrial sector in the largest industrial country in the world to a value of 35.1 compared to 48.5 in the previous reading last March, as we may witness The service sector contracted to 30.5 compared to 39.8 in March.

To reveal the housing market data from the release of the New Home Sales reading, which may explain a 16.0% decline to 643 thousand homes compared to a 4.4% decline at 765 thousand homes last February. In another context, we followed yesterday, and US Treasury Secretary Stephen Mnuchin expressed The fact that his country needs to boost fiscal spending and that 60 million workers is likely to find assistance from the business loan program.

The US Treasury Secretary mentioned Manuchin that the cost of lending to workers who will get loans will be low, given that the interest on federal funds is currently at zero levels, and that came with his discussion that the United States will provide $ 2.6 trillion directly to support the largest economy in the world. Facing the repercussions of the coronavirus outbreak, it reported that the Federal Reserve was providing $ 4 trillion in liquidity.

Other than that, we followed last Tuesday, the Senate announced the agreement of the polar American policy the ruling Republican Party, which has the majority of the Senate and the Democratic Party with the majority of the House of Representatives, on a program to support small companies and medical centers worth $ 484 to address the consequences of the outbreak of the Corona virus, including $ 320 Billion for small businesses The bill is expected to pass in the House of Representatives later today.

It is reported that US President Trump recently announced his administration's plan to gradually restart and operate the American economy, indicating that the global medical crisis may subside later, while its economic consequences remain, and according to the latest figures issued by the World Health Organization, the number of cases infected with the Coronavirus has increased to Close to 2.48 million and 169,151 people were killed in 213 countries.

In another context, the markets are still assessing the catastrophe of the oil markets and the sharp fluctuations in the global energy markets in addition to other indications that global companies and banks are making it difficult to provide expectations in the shadows of the global closure due to the outbreak of the Coronavirus, and we would like to point out that the collapse of the oil markets earlier this week She points out that the blow to the global economy will be much worse than what investors expected.

Technical analysis

The dollar versus yen continues to fluctuate around the 107.68 level, and the stochastic indicator continues to lose positive momentum, while the MA 50 constitutes a continuous negative pressure against the price.

Consequently, we continue to favor the bearish trend for the upcoming period, which targets 106.44 level as the next main station, taking into consideration that failure to consolidate below 107.68 and the rush to breach 108.35 will stop the expected decline and lead the price to achieve gains that start with testing the level of 109.22.

The expected trading range for today is between 106.80 support and 108.30 resistance

Expected trend for today: bearish