USDJPY analysis 12.05.2020

The fluctuation of the US dollar in a narrow range tilted towards the decline during the Asian session to witness its bounce for the second session from the top since April 23 against the Japanese yen, following the developments and economic data that it had reported on the Japanese economy and on the cusp of developments and economic data expected on Tuesday by the American economy, which includes Recent members of the Federal Open Market Committee.

At exactly 06:16 am GMT, the US dollar pair fell against the Japanese yen by 0.18% to 107.47 levels compared to the opening levels at 107.66 after the pair achieved its lowest level during the trading session at 107.35, while it achieved the highest at 107.70.

We have followed about the Japanese economy, the third largest economy in the world and the third largest industrialized country globally after both the United States and China, to reveal the initial reading of the leading indicators, which showed a decline to 83.8 compared to 91.7 last February, worse than expectations that indicated a decline To 84.3, while the initial reading of the confidence index showed a decline to 90.5 compared to 95.7 in February.

On the other hand, investors are waiting for the US economy to disclose inflation data with the release of the CPI reading that may show the contraction widening to 0.7% compared to 0.4% in March, as the fundamental reading of the index may show the contraction widening to 0.2% versus 0.1% , And the annual reading of the index may reflect slowing growth to 0.4% versus 1.5%, as the substantial annual reading may show slowing growth to 1.7% versus 2.1%.

This comes before we witness the speech of members of the Federal Open Market Committee, President of the Federal Reserve Bank of America Patrick Harker about the economic impact of the Coronavirus in the Chamber of Commerce of Delaware in Wilmington, in conjunction with the testimony of the Deputy Governor of the Federal Reserve Randall Carls on supervision and regulation before the Banking Committee of the Council The elders in Washington.

Up to the US Treasury revealed a reading of the federal budget, which may reflect the widening deficit of $ 729.7 billion compared to $ 119.1 billion in March, before we witness the speech of the Federal Open Market Committee member and President of the Cleveland Bank Federal Reserve Loretta Mester about monetary policy And economic outlook at the Association of Certified Financial Analysts in Chicago, via satellite.

Technical analysis

The dollar pair rose against the yen strongly up after completing the bearish wedge pattern indicated yesterday, to directly touch the positive target 107.68, and we need to monitor the price behavior during the upcoming sessions, as penetration of this level will extend the pair's gains to reach 109.22 as the next stop.

SMA 50 meets with the current areas to add more strength to this resistance, which provides opportunities for a downside bounce and visiting the 106.44 areas again.

Now, we are likely to witness sideways trading between support levels 106.44 and resistance 107.68 until the price can penetrate one of them and clearly define its next targets, noting that breaking the mentioned support will press the price to drop again and head towards 105.20 as the main target.

The expected trading range for today is between 106.70 support and 108.60 resistance

Expected trend for today: sideways