USDJPY analysis 01.06.2020

The fluctuation of the US dollar in a narrow range that tends to decline during the Asian session against the Japanese yen, following the developments and economic data that were followed by the Japanese economy and on the cusp of developments and economic data expected on Monday by the US economy, the largest economy in the world, and amid market pricing of protests in some cities in the states United and escalate tensions between Washington and Beijing.

At exactly 05:55 AM GMT, the US dollar pair fell against the Japanese yen by 0.14% to 107.56 levels compared to the opening levels at 107.71 after the pair achieved its lowest level during the trading session at 107.52, while it achieved its highest at 107.86, knowing that The pair started the trading session on a falling price gap after it concluded the trading of the first half of 2020 at 107.83.

On the Japanese economy, we have followed the release of the Capital Expenditure Index, which showed a rise of 4.3% against a decline of 3.5% in the fourth quarter, contrary to expectations that the decline fell to 5.1%, and this came before the disclosure of the final reading of the Manufacturing PMI by Markit for Japan, which showed the contraction stable at 47.8, is in line with the preliminary reading of last month and expectations, compared to 41.9 last April.

On the other hand, markets are looking to reveal the final reading of the manufacturing PMI by Markit for the United States, which may reflect the stability of the contraction at $ 39.8, little changed from the initial reading of last month and compared to the contraction at 36.1 in April, before we witness By the US economy, the construction spending index showed a 6.5% decline compared to a 0.9% rise in March.

This comes in conjunction with the disclosure also by the largest industrialized country in the world about the reading of the Institute of Industrial Supply index, which may show contraction shrinkage to 43.5 compared to 41.5 in April, as the reading of the Institute of Industrial Supply measured in prices may indicate shrinkage of deflation to its value 40.0 vs. 35.3, and we would like to point out, because the reading issuance at a value of 50 or higher reflects amplitude, while its issuance less than 50 indicates contraction.

Otherwise, during the past weekend, we followed violent protests taking place in some cities in the United States with the curfew failing to stop confrontations between activists and law enforcement forces, as protesters took to the streets after weeks of closures during the Coronavirus pandemic, which caused the loss of millions For their jobs and especially heavier on minority communities in America.

Technical analysis

The dollar versus the yen faced strong negative pressure in the previous sessions to break the 107.35 level, but it bounced up strongly to settle above the 107.35 barrier, which keeps the bullish scenario current and effective in the intraday basis, waiting for the resistance of the lateral range that limits the recent trading to exceed the opportunities to go towards Our main target is expected at 109.22.

We recall that breaching 107.35 will stop the suggested positive scenario and press the price to drop towards 106.44 initially.

The expected trading range for today is between 107.00 support and 108.40 resistance.

Expected trend for today: bullish.