USDJPY analysis 07.07.2020

The US dollar fluctuated in a narrow range tilted to the upside during the Asian session against the Japanese yen, following the developments and economic data that were followed by the Japanese economy and on the cusp of developments and economic data expected on Tuesday by the US economy, the largest economy in the world.

At 05:54 am GMT, the US dollar pair rose against the Japanese yen by 0.13% to 107.49 levels compared to the opening levels at 107.35 after the pair achieved its highest level during the trading session at 107.50, while achieving the lowest at 107.25.

We have followed on from the Japanese economy the release of the annual reading of the household spending index, which showed that the decline widened to 16.2% compared to 11.1% last April, worse than the expectations that indicated the expansion of the decline to 11.8%, and this came before we witnessed the disclosure of the initial reading of the leading indicators That showed an increase to 79.3 versus 77.7 in April, below expectations for a rise to 79.5.

In another context, we followed earlier this week, according to Japanese Economy Minister Yasutoshi Nishimura that the Japanese government agreed with experts that it was not possible to lift more restrictions imposed on Asia’s second largest economy and the third largest economy in the world to contain the outbreak of the Corona virus by July 10 / This July, clarifying that this decision will be adopted taking into account the comprehensive steps to prevent the spread of coronavirus in his country.

On the other hand, investors are currently awaiting by the US economy the disclosure of labor market data with the release of a job reading and job turnover reading that may reflect a decrease to 4.70 million compared to 5.05 million last April, and that comes before we witness the talk of a member of the Federal Committee For Open Market and Federal Reserve Governor Randall Carls on the Financial Stability Board at the Treasury Club Food Seminar online.

Technical analysis

The dollar against the yen trades bounced lower yesterday after testing the 107.68 level, reinforcing the expectations of the continuation of the expected bearish trend scenario over the intraday basis, awaiting the visit of the 106.44 level, which represents our next negative target.

Moving below SMA 50 supports the expected decline, keeping in mind that breaching 107.68 will stop the negative scenario and push the price to recover and head towards 109.22 areas in the near term.

The expected trading range for today is between 106.60 support and 108.00 resistance.

Expected trend for today: bearish.