USDJPY analysis 08.06.2020

The fluctuation of the US dollar in a narrow range slanted toward decline during the Asian session, to witness its bounce for the second session from the top since March 26 against the Japanese yen, following developments and economic data that it announced today, Monday, on the Japanese economy and amid the scarcity of economic data on the US economy earlier this week. Carries with it the Federal Open Market Committee meeting.

At exactly 6:18 am GMT, the US dollar pair fell against the Japanese yen by 0.09% to 109.54 levels compared to the opening levels at 109.67 after the pair achieved its highest level during the trading session at 109.70, while achieving the lowest at 109.38, knowing that The pair started the trading session on an upward price gap after it concluded the trading last week at 109.59.

On Sunday, we followed up on the Japanese economy, the second largest economy in Asia and the second largest in the world, to disclose the growth data for the first quarter with the release of the seasonally adjusted final reading of GDP, which showed a contraction of 0.6% compared to a contraction of 0.9% in the previous initial reading for the first quarter and a contraction of 1.8 % In the previous reading for the fourth quarter, worse than expectations, which indicated a contraction of 0.5%.

In the same context, the annual final reading of the GDP measured by prices showed a growth of 0.9%, unchanged from the previous annual reading of the previous quarter, in line with expectations and against a growth of 1.2% in the fourth quarter, with that coinciding with the release of the annual reading of the bank lending index, which reflected the acceleration Growth to 4.8% compared to the previous reading for the month of March.

On Monday, we also followed the Japanese economy on the release of the current account reading, which showed that the surplus contracted to 0.26 trillion yen compared to 1.97 trillion yen in March, worse than expectations that indicated the contraction of 0.48 trillion yen, just as the seasonally adjusted reading of the same index showed that the surplus has shrunk to 0.25 billion yen, compared to 0.94 billion yen in March, is also worse than expectations that the surplus will shrink to 0.33 billion yen.

Up to the Japanese Cabinet Office unveiling an ECO Watchers statistic reading of the current and future conditions that showed the contraction of the current conditions shrinking to 15.5 compared to 7.9 in April, outperforming the expectations that the contraction shrank to 10.7, as the reading of future conditions showed that the contraction shrank to 36.5 versus 16.6, contrary to expectations that the contraction will widen to 9.5.

On the other hand, the markets are looking for tomorrow, Tuesday, for the launching of the activities of the Federal Open Market Committee meeting that will be held tomorrow and after tomorrow, Wednesday, via satellites in Washington, through which the short-term benchmark interest rates for the second meeting are expected to be between zero and 0.25% simultaneously. With the disclosure of the expectations of members of the Committee to the rates of growth, inflation and unemployment in addition to the future interest rates for the next three years.

Up to the press conference to be held by Federal Reserve Governor Jerome Powell on Wednesday, exactly half an hour after the FOMC meeting ended, to comment on the decisions of the Federal Committee, which recently adopted many stimulus programs until the economy showed signs of recovery, led by the Treasury bond purchase program at $ 500 One billion monthly and mortgage bonds, at least $ 200 a month.

Technical analysis

The USDJPY pair managed to breach the 109.22 level and hold above it, which supports the continuation of our long-term bullish outlook, on its way to achieving new positive targets that start at 110.70 and extend to 111.70.

Therefore, the bullish trend will remain dominant during the upcoming sessions, noting that breaking 109.22 and holding below it will put the price under new negative pressure targeting initially visiting areas of 107.68.

The expected trading range for today is between 108.80 support and 110.30 resistance.

Expected trend for today: bullish.