Japanese Yen Analysis 03-07-2020

The US dollar fluctuated in a narrow range tilted to the upside during the Asian session against the Japanese yen amid the scarcity of economic data on Friday from the Japanese economy and the scarcity of economic data in the last sessions of the week by the American economy, the largest economy in the world because of the Independence Day holiday in the United States of America.

At 6:14 am GMT, the US dollar pair rose against the Japanese yen by 0.01% to 107.51 levels compared to the opening levels at 107.50, after the pair achieved its highest level during the trading session at 107.57, while achieving the lowest at 107.44.

On Thursday, we followed yesterday, the US labor market data for June showed unemployment rates fell to 11.1% compared to 13.3% in May, outperforming expectations for a decline to 12.4%, with a reading of the employment change index for sectors other than agriculture creating 4,800 thousand jobs compared to 2,699 thousand jobs added in May, beating expectations for creation of 3,037 thousand.

In the same vein, yesterday's average hourly earnings index showed that the decline expanded to 1.2% compared to 1.0% in May, contrary to expectations that the decline will decrease to 0.8%. This came in conjunction with the reading of the claims requests index for the week that passed on the 26th of June, declining by 55 thousand applications to 1,427 thousand applications compared to 1,482 thousand applications in the previous reading.

This comes hours after the Federal Reserve revealed last Wednesday the minutes of the Federal Open Market Committee meeting held on 9-10 June, during which interest rates were fixed at zero levels between zero and 0.25%, which came in line with expectations At that time, with the disclosure at the time of the members ’expectations of the rates of growth, inflation and unemployment, in addition to the future of interest rates for the next three years.

We would like to point out, because the expectations of the members of the Federal Committee included at that time that the interest on federal funds will remain at their zero levels until 2022 and that the American economy may shrink 6.5% during 2020 and that unemployment rates may reach 9.3% by the end of the current year 2020, before retreating To 6.5% in 2021 and to 5.5% in 2022.

It is noteworthy that Fed Governor Jerome Powell stressed in the press conference held after the meeting the commitment of the Federal Reserve to use all tools to support the American economy in light of the current challenges to achieve the goal of inflation, price stability and access to optimal exploitation of the labor market, explaining that the Corona virus caused health damage And expanded economics in America and abroad.

Technical analysis

The dollar against the yen trades stable below 107.68, and we notice that the stochastic is providing a negative crossover now, waiting for the price to be stimulated to resume negative trades during the upcoming sessions, where our main expected target is located at 106.44.

Therefore, we will maintain our expectations for the downside for today, noting the importance of holding below 107.68 for the continuation of the suggested decline.

The expected trading range for today is between 106.70 support and 108.00 resistance

Expected trend for today: bearish