USDJPY analysis 05.06.2020

The fluctuation of the US dollar in a narrow range tilted to the upside during the Asian session to witness the highest since April 6 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 on Friday by the American economy, the largest economy in the world and central Market pricing to reopen global economies in exchange for escalating protests in America.

At exactly 6:10 am GMT, the US dollar pair rose against the Japanese yen by 0.08% to 109.24 levels compared to the opening levels at 109.15 after the pair achieved its highest level in two months at 109.31, while achieving the lowest during the trading session at 109.05.

We have followed the Japanese economy on the release of the annual reading of the household spending index, which showed that the decline widened to 11.1% compared to 6.0% last March, outperforming the expectations that indicated a decline in the decline to 12.3%, and this came before we witnessed the disclosure of the initial reading of the leading indicators Which showed a decrease to 76.2 compared to 84.7 in March, worse than expectations that indicated a decrease to 76.3.

On the other hand, investors are currently awaiting by the American economy the disclosure of labor market data with the release of the employment change index for sectors other than agriculture, which may reflect the loss of 7,750 thousand jobs compared to the loss of 20,537 thousand jobs last April, while an average index reading may show Income per hour, growth slowed to 1.0%, compared to 4.7%. That is, with the unemployment rate reading up to 19.4% compared to 14.7% in April.

Technical analysis

The dollar versus the yen succeeded in touching our awaited target at 109.22 and making attempts to breach it, to provide indications of the price trend to continue rising during the coming period, noting that the next stop reaches 110.70.

SMA 50 continues to support the price from below, consolidating the chances of achieving more gains in the short and long term, taking into consideration that failure to breach the above mentioned level will force the price to rebound down to head towards 107.68 areas mainly.

The expected trading range for today is between 108.50 support and 110.00 resistance.

Expected trend for today: bullish.