USDJPY analysis 24.07.2020

The US dollar fell during the Asian session against the Japanese yen, to witness the lowest level since June 23, when it tested the lowest level since the seventh of May amid the scarcity of economic data by the Japanese economy due to the health and sports day holiday in Japan and on the eve of developments and economic data expected today, Friday, by the US economy, the largest economy in the world, and in light of the growing concern about the escalation of tensions between Washington and Beijing.

At exactly 06:00 am GMT, the US dollar pair fell against the Japanese yen by 0.41% to 106.42 levels compared to the opening levels at 106.86 after the pair achieved its lowest level in a month at 106.36, while it achieved its highest during the trading session at 106.90.

Investors are currently awaiting the disclosure of the initial reading of the Markit Industrial and Service Purchasing Managers Index for the United States of America, which may reflect the expansion of the industrial sector in the largest industrial country in the world to a value of 52.0 compared to a contraction of 49.8 in the previous reading last June, Likewise, we may witness the services sector expanding to 51.0 compared to 47.9 in June.

This comes before we witnessed by the US economy the disclosure of housing market data with the release of the New Home Sales Index, which may indicate an increase of 4.0% to about 700 thousand homes compared to a rise of 16.6% at 676 thousand homes last May. Otherwise, yesterday we followed the criticism of US Secretary of State Mike Pompeo of China in a speech, stating that Washington will no longer tolerate Beijing's attempts to usurp the world order.

This was followed, China’s call for the United States to close the American consulate in Chengdu, in response to the recent American decision to close the Chinese consulate in Houston, and the statement issued by the Chinese Foreign Ministry mentioned that “the current situation between Washington and Beijing is not something that China wants to see, and the United States is responsible Completely on him, "and Beijing again urged Washington to rescind the wrong decision and create conditions for a return to bilateral relations.

Technical analysis

The dollar pair against the yen succeeded in achieving our expected goal at 106.44 after the opening of the day with a noticeable decrease, and presses negatively on this level in an attempt to break it, to support the expectations of the continuation of the bearish trend in the intraday and short term, while noting that exceeding the mentioned level will open the way towards heading towards 105.20 as a main target next.

SMA 50 continues to support the current descending wave, so we will continue to favor the bearish trend for the next period unless the price rushes to breach the 107.68 level and hold above it.

The expected trading range for today is between 105.70 support and 107.00 resistance.

Expected trend for today: bearish.