Japanese Yen Analysis 30-06-2020

The US dollar fluctuated in a narrow range tilted to the upside during the Asian session to witness its bounce to the fifth session from the lowest since May 7, when it tested the lowest since March 17 against the Japanese yen after the developments and economic data that it followed on the Japanese economy and on the cusp of Economic developments and data expected today by the US economy, which includes the testimony of Federal Reserve Governor Jerome Powell with US Treasury Secretary Stephen Mnuchin before the House Financial Services Committee in Washington.
 
At exactly 05:53 AM GMT, the US dollar pair rose against the Japanese yen by 0.17% to 107.76 levels compared to the opening levels at 107.58 after the pair achieved its highest level during the trading session at 107.79, while achieving the lowest at 107.54.
 
We followed about the Japanese economy, the second largest economy in Asia, the third largest economy, and the third largest industrialized country globally. The release of the first reading of industrial production, which showed a decline in retreat to 8.4% compared to 9.8% last April, is worse than expectations that indicated a decline in the decline to 5.6%, while The annual reading of the same index showed that the decline widened to 25.9% compared to 15.0% in April, also worse than expectations, which indicated a decline of 11.3%.
 
This came in conjunction with the release of the unemployment rate reading, which showed an increase to 2.9% compared to 2.6% in April, worse than expectations that indicated an increase to 2.8%, to the disclosure of housing market data with the release of the annual reading of the index of start-up that showed a contraction The decline fell to 12.3% compared to 12.9% in April, contrary to expectations that the decline will extend to 15.0%.
 
On the other hand, investors are currently awaiting by the US economy the disclosure of housing market data with the release of the annual reading of the house price index, which may show a slowdown in growth to 3.8% compared to 3.9% last April, before and before the disclosure by the largest industrial country in The world reported that the Chicago PMI reading may reflect the contraction shrinking to 45.0 compared to 32.3 in May.
 
This comes before we also witnessed by the largest economy in the world the release of the consumer confidence index, which may appear widening to 91.6 compared to 86.6 in May, and before we witness the speech of the Federal Open Market Committee member and New York Federal Reserve Chairman John Williams about the recession The US and the Monetary Policy Response at an online seminar hosted by the International Finance Institute.
 
Later in the day, markets were looking forward to the talk of Federal Open Market Committee member and Federal Reserve Governor Elle Brenard about the Dodd-Frank Act at an online seminar hosted by the Brookings Institution and the University of Michigan, leading to Fed Governor Jerome Powell’s testimony with US Treasury Secretary Stephen Mnuchin via satellite in front of the House Financial Services Committee in Washington.
 
In the same context, Federal Open Market Committee member and Federal Reserve Bank President Neil Kachkari is also expected to participate in a virtual panel discussion on racial inequality and social justice hosted by the National Association of Business Economics, and this comes in the wake of strikes in Minneapolis and many of the United States Recently, James Floyd was killed by American police officers.
 
We would like to point out, because the Federal Reserve Governor Powell confirmed yesterday that the expectations regarding the American economy are "unconventionally uncertain", expressing that the adoption of more monetary stimulus may be necessary, and it is reported that Powell noted last week during his testimony before the Congress that there is a case of Uncertainty about the timing and strength of the potential economic recovery and that the current downturn may lead to widening inequality within his country if the matter is not contained.
 
Last week, Powell also mentioned in his semi-annual testimony about monetary policy before the Senate Banking Committee and the House of Representatives Financial Services Committee in the US Congress that "until confidence returns that the Corona pandemic is under control, a full recovery will not be possible" and that "the downward curve continues and with it continues Possibility of jobs falling under the risk of final loss and business closure. "
 
At the time, the Federal Reserve governor expressed before the Senate, in both the Senate and the House of Representatives, that it is unlikely that we will witness a complete recovery of the largest economy in the world before restoring economic confidence, with his statement that the epidemic has a greater impact on people with low incomes, and his discussion of the fact that the difference in the rise in unemployment is now a year. 2008, that at that time there were no jobs, while the current situation is the result of business closings and that with its return people return to their jobs.
 
It is noteworthy that the US Congress has allocated $ 3 trillion so far as financial stimulus that included direct financial distributions for families and plans to exempt from small business loans, while the Federal Reserve has implemented cash stimulus programs exceeding $ 1 trillion to support the credit market for families and companies, the last of which was the launch of the Federal Reserve last week for a program that provides a package Loans worth $ 600 billion for businesses that employ around 15,000 people or whose returns exceed $ 5 billion.

Technical analysis

The dollar pair against the yen presented positive trades yesterday to make attempts to breach the 107.68 level but did not close the daily candle above it, noting that the price starts the day with a new rise to move above this level, which provides signals on the price trend to shift towards the upside, supported by moving above the EMA50 , But we notice that the stochastic is showing overbought signs to hinder positive attempts.
 
Consequently, we prefer stopping temporarily on the neutral until the price confirms its position in relation to the mentioned level, noting that confirming its breach will push the price for new gains reaching 109.22, while consolidation below it will press the price to resume the decline whose first target is located at 106.44.
 
The expected trading range for today is between 107.00 support and 108.50 resistance
 
Expected trend for today: neutral