USDJPY analysis 14.05.2020

The fluctuation of the US dollar in a narrow range tilted toward decline during the Asian session to witness its bounce to the fourth session from the top since April 23 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 Thursday by the US economy, which includes Federal Open Market Committee member Neil Kachkari later today.

At exactly 06:02 am GMT, the US dollar pair fell against the Japanese yen by 0.19% to 106.83 levels compared to the opening levels at 107.03 after the pair achieved its lowest level during the trading session at 106.82, while achieving the highest at 107.10.

We have followed about the Japanese economy, the Bank of Japan revealed the annual reading of the M-2 bank lending index, which showed an acceleration of growth to 3.7% compared to 3.3% in the previous annual reading of last March, surpassing expectations that indicated a growth acceleration to 3.4%, and came That was before we witnessed the disclosure of the annual preliminary reading of the machinery rate index, which reflected the widening of the decline to 48.3% compared to 40.7% in March.

On the other hand, investors are currently awaiting by the American economy for the release of the index of subsidy requests for the last week on the ninth of May, which may reflect a decline of 669 thousand requests to 2,500 thousand requests compared to 3,169 thousand requests in the previous reading, while the reading of subsidy applications may appear Continuing for the last week in the second of this month, increasing by 2,453 thousand requests to 25,100 thousand requests compared to 22,647 thousand requests.

This comes in conjunction with the release of the import price index, which may explain the widening decline to 3.1% compared to 2.3% in March, and hours after Federal Reserve Governor Jerome Powell expressed yesterday that "despite the fact that the economic response was timely and large enough, However, it may not be the last chapter, given that the road ahead is very uncertain and subject to great risks. "

Powell also warned that the potential economic recession may be deeper and longer without additional fiscal stimulus, which reduced appetite for risk among investors, especially with the uncertainty that markets are witnessing in reopening global economies and easing the social divergence measures that have been imposed as part of efforts to curb the spread of Coronavirus previously, which could lead to a possible second wave of deadly virus outbreaks with re-opening.

Technical analysis

The dollar versus yen presented negative trades expected yesterday, on the way to visit the sideways range support located at 106.44, and gets negative signals through the stochastic and the moving average 50, which support the chances of achieving a further decline during the upcoming sessions.

But until now, we are continuing to favor the sideways tendency between the mentioned support and the resistance 107.68 until one of these two levels is breached to define the following targets more accurately, noting that breaking the support will push the price to 105.00 directly while breaking the resistance will lead the price to rise and head towards 109.22 as a station Next major.

The expected trading range for today is between 106.30 support and 107.80 resistance.

Expected trend for today: sideways.