JPYUSD analysis 20.07.2020

The fluctuation of the US dollar in a narrow range tilted to the upside during the Asian session, to witness the highest level since the eighth of July against the Japanese yen, following the developments and economic data that he announced earlier this week on the Japanese economy, which included the disclosure of the minutes of the meeting of the Japanese Central Bank and amid the scarcity of data Economic Monday by the US economy, the largest economy in the world.

At 6:11 am GMT, the US dollar pair rose against the Japanese yen by 0.12% to 107.25 levels compared to the opening levels at 107.12 after the pair achieved its highest level in two weeks at 107.53, while achieving the lowest during the trading session at 107.02.

We have followed the Japanese economy, the second-largest economy in Asia and the third-largest economy in the world. The reading of the trade balance showed that the deficit narrowed to 269 billion yen compared to 833 billion yen last May, contrary to expectations that the deficit would shrink to 36 billion yen, as I explained. A seasonally adjusted reading of the same index reduced the deficit to 424 billion yen from 586 billion yen, also worse than expectations that indicated the deficit narrowed to 302 billion yen.

This came with the annual reading of Japanese exports showing that the decline decreased to 26.2% compared to 28.3% in May, worse than expectations that indicated a decrease in the decline to 24.9%, as the annual reading of imports showed that the decline decreased to 14.4% compared to 26.2%, exceeding expectations that She pointed to a decrease in the decline to 16.8%, and we would like to point out, because the decline in exports last month was due to the decline in exports of cars, which represent a large part of Japanese exports.

In another context, we have also followed the Bank of Japan disclosure of the minutes of its last meeting held on July 15, during which monetary policy makers at the Bank of Japan decided to keep interest rates negative at 0.10%, while also remaining committed to directing government bond yields. With a 10-year period at zero and the assurance that additional steps will be taken to facilitate the cash without hesitation if necessary.

The minutes of the Japanese central meeting included a warning that the risks to the economy are in a declining direction, and it is reported that the Bank of Japan revealed on Wednesday the monetary policy statement and its quarterly expectations that touched on the fact that the economy may shrink 4.7% during the fiscal year 2020, and that it may witness an expansion of 3.3% in the fiscal year 2021 and 1.5% in 2022 and that the huge may shrink 0.5% in the fiscal year 2020 before expanding 0.3% in 2021 and 0.7% in 2022.

Technical analysis

The dollar against the yen pair opens today trading with a noticeable positive to approach the pivotal resistance test 107.68, influenced by the positivity of the stochastic indicator, but as long as the price is below this resistance, our bearish trend expectations will remain valid, pending a visit to the 106.44 level initially.

It should be noted that breaching 107.68 and holding above it will stop the suggested decline and lead the price to the upside move and achieve positive targets reaching 109.22 in the short term.

The expected trading range for today is between 106.50 support and 108.00 resistance.

Expected trend for today: bearish.