USDJPY analysis 09.06.2020

The US dollar fell during the Asian session to witness its rebound for the third session from its top since March 26 against the Japanese yen after the developments and economic data that is reported on the Japanese economy and on the cusp of developments and economic data expected today by the American economy, the largest economy in the world, which includes the launch The FOMC meeting today and tomorrow, Wednesday.

At exactly 06:03 AM GMT, the US dollar pair fell against the Japanese yen by 0.35% to 108.05 levels compared to the opening levels at 108.43 after the pair achieved its lowest level during the trading session at 107.92, while achieving the highest at 108.54.

We have followed the Japanese economy on the release of the annual reading of the average wage index, which showed a 0.6% decline compared to a 0.1% rise last March, outperforming the expectations that indicated a 1.0% decline, and that came before we witnessed the annual reading of the bank lending index showed that growth accelerated to 5.1% versus 3.7% last April, beating forecasts of 4.0%, to reveal the annual preliminary reading of the machinery rates index, which reflected the widening of the decline to 52.8% compared to 48.3% in April.

On the other hand, investors are currently awaiting by the US economy the release of the final reading of the wholesale stocks index, which may confirm an increase of 0.4%, unchanged from the previous initial reading for the month of April, and against a decline of 0.8% last March, in conjunction with the disclosure of data, The labor market with the release of a job read and turnover statistic that may reflect a decrease to 5.75 million compared to 6.19 million in March.

Other than that, the markets are looking at a later time for the launching of the FOMC meeting that takes place today and tomorrow Wednesday via satellite in Washington, which is expected to keep the short-term benchmark interest rates for the second meeting at between zero and 0.25% in conjunction 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 that Federal Reserve Governor Jerome Powell will hold tomorrow, specifically, half an hour after the FOMC meeting ends, 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

Yesterday the dollar versus the yen traded with a strong negative to breach the 109.22 level and approached the pivotal support 107.68, noting that the bullish intraday channel support meets with this level, which represents the 38.2% Fibonacci correction, in conjunction with the appearance of significant oversaturations in the selling through the stochastic indicator.

Consequently, these factors encourage us to favor a bullish bounce to resume the main bullish trend, and targets start with testing the level of 109.22, taking into consideration that breaking 107.68 will pressure the price to incur more losses and heading towards 106.44 as a next negative station.

The expected trading range for today is between 107.70 support and 109.00 resistance.

Expected trend for today: bullish.