USDJPY analysis 07.05.2020

The fluctuation of the US dollar in a narrow range tilted to the upside during the Asian session to witness its rebound from the lowest since March 17 against the Japanese yen after the developments and economic data that were reported by the Japanese economy and on the cusp of developments and economic data expected Thursday by the US economy, which includes The talk of a member of the Federal Open Market Committee and Chairman of the Federal Reserve Bank of Patrick Harker.

At 6:12 am GMT, the US dollar pair rose against the Japanese yen by 0.19% to 106.32 levels compared to the opening levels at 106.12 after the pair achieved its highest level during the trading session at 106.35, while achieving the lowest at 105.99.

We have followed about the Japanese economy revealing the annual reading of the monetary base index by the Bank of Japan, which showed a decline to 2.3% compared to 2.8% last February, worse than expectations that indicated an acceleration in the growth rate to 4.5%, and it is reported that the Japanese Central Bank This indicator has started to be used as its main operational objective for the monetary base scheme since April of 2013.

On the other hand, investors are currently awaiting by the US economy the release of the aid claims index for the last week on the second of May, which may reflect a decline of 839 thousand applications to 3,000 thousand requests compared to 3,839 thousand requests in the previous weekly reading, while reading requests may appear The continuous benefit for the last week on the 25th of this month, increasing by 1,913 thousand applications to 19,905 thousand applications compared to 17,992 thousand requests.

This comes in conjunction with the issuance of the initial reading of the single labor cost index, which reflects the acceleration of growth to 4.3% compared to 0.9% in the fourth quarter, while the initial reading of the productivity of the sectors other than agricultural may indicate a decrease of 5.4% versus an increase of 1.2%, leading to the participation of a member of the Federal Committee and the head of a bank Philadelphia Federal Reserve Patrick Harker at a hypothetical panel discussion on Corona and economic forecasts at the Chicago Council on World Affairs.

Technical analysis

The dollar against the yen managed to break the 106.44 level and close the daily candle below it, which supports the continuation of our expectations for the downtrend effectively during the upcoming sessions, and the path is open for heading towards our next expected target at 105.20.

Therefore, the bearish trend scenario will remain effective in the intraday and short term, taking into consideration that stability below 106.44 is a first condition for the suggested decline to continue.

The expected trading range for today is between 105.20 support and 106.80 resistance.

Expected trend for today: bearish.