USDJPY analysis 10.07.2020

The fluctuation of the US dollar in a narrow range slanted toward decline during the Asian session, to witness its bounce for the sixth session in eight sessions from the top since June 9 against the Japanese yen, following the developments and economic data that it had reported on the Japanese economy and on the cusp of developments and economic data expected on Friday by The American economy and in the shadows of concern about the increasing number of people infected with the virus globally.

At exactly 05:56 AM GMT, the US dollar pair fell against the Japanese yen by 0.29% to 106.90 levels compared to the opening levels at 107.21 after the pair achieved its lowest level since June 26 at 106.89, while it achieved its highest during the trading session At 107.26.

On the Japanese economy, we have followed the release of the PPI reading, which is an initial indicator of inflationary pressures, which showed a growth of 0.6% compared to a 0.4% contraction last May, outperforming the expectations that indicated a 0.4% growth, while the annual reading of the same indicator showed a contraction To 1.6%, compared to 2.8% in the prior annual reading for May, also beating expectations for a contraction of 2.0%.

On the other hand, investors are currently awaiting by the US economy the release of the PPI reading, which may reflect the stability of growth at 0.4% during June, while the fundamental reading of the same indicator may show 0.1% growth versus 0.1% contraction in May, and it may appear The annual reading of the index shrank contraction to 0.2% compared to 0.8% in the previous annual reading, while the substantial annual reading may reflect the acceleration of growth to 0.4% against 0.3%.

Technical analysis

The dollar versus yen pair shows a more bearish tendency to start testing the 107.00 barrier, which supports the continuation of our bearish trend expectations, which aims to test 106.44 level as a next station, noting that SMA 50 constitutes negative pressure to support the downside expectations.

We point out that breaching the targeted level will extend the descending wave to reach 105.20 as the next main target, while the expected decline will remain valid unless the 107.68 level is breached and stability above it.

The expected trading range for today is between 106.20 support and 107.70 resistance.

Expected trend for today: bearish.