USDJPY analysis 06.07.2020

The US dollar fluctuated in a narrow range slanting to the upside during the Asian session to witness its rebound to the seventh session in ten sessions from the lowest since May 7 against the Japanese yen amid the scarcity of economic data at the beginning of this week from the Japanese economy and on the cusp of developments and economic data expected today Monday by the US economy, the largest economy in the world.

At exactly 06:00 am GMT, the US dollar pair rose against the Japanese yen by 0.19% to 107.69 levels compared to the opening levels at 107.49 after the pair achieved its highest level during the trading session at 107.77, while achieving the lowest at 107.46, knowing, The pair started trading on a falling price gap after it concluded the trading last week at 107.51 levels.

Investors are awaiting the final reading of the Markit Service Supply Index by Markit for America, which may reflect contraction contraction to 47.0 compared to 46.7 in the initial reading of last month and against contraction at 37.5 in May, before revealing the reading of the Institute of Supply Index Services, which may explain a widening to 50.0 versus a contraction at 45.4 in May.

This comes hours after the data showed the US labor market for the month of June last Thursday, unemployment rates fell to 11.1% compared to 13.3% in May, outperforming the expectations that indicated a decline to 12.4%, with the reading of the employment change index for sectors other than Agri created 4,800,000 jobs compared to 2,699,000 added jobs in May, beating expectations for 3,037,000.

In the same context, the average hourly earnings reading last week showed that the decline widened 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 aid claims index for the last week on June 26, which fell by 55 thousand applications to 1,427 thousand applications compared to 1,482 thousand requests in the previous reading.

Other than that, we followed last Saturday, the World Health Organization reported that more than 200,000 cases of coronavirus infection were confirmed in the previous 24 hours, which is a record number, amid the high number of cases in densely populated US states such as Florida, Texas and California, according to the latest Figures issued by the organization, the number of cases infected with the Corona virus increased to more than 11.25 million, and 528,204 people were killed in 216 countries.

Technical analysis

The dollar versus the yen is showing positive trades with the opening of the day to test the pivotal resistance 107.68, which requires attention from the upcoming trades, as the price needs to hold below this level to keep the downside scenario effective for the coming period, which mainly targets the 106.44 level.

On the other hand, we should note that breaching 107.68 and holding above it will lead the price to achieve additional gains reaching 109.22.

The expected trading range for today is between 106.90 support and 108.20 resistance.

Expected trend for today: bearish.