JPYUSD analysis 13.08.2020

The US dollar fluctuated in a narrow range that tends to decline during the Asian session, to witness its retracement of the second session from its high since July 23 against the Japanese yen following the developments and economic data that they followed on the Japanese economy and on the cusp of economic developments and data expected today, Thursday, by the US economy The largest economy in the world.

At exactly 05:50 am GMT, the US dollar against the Japanese yen declined by 0.22% to 106.68 levels compared to the opening levels at 106.91, after the pair achieved its lowest level during the session's trading at 106.60, while it achieved its highest at 106.92.

The Japanese economy has followed up on the disclosure of inflation data with the release of the producer price index reading, which is a preliminary indicator of inflationary pressures, which showed that growth remained stable at 0.6%, unchanged from the previous reading for June, surpassing expectations that indicated a slowdown in growth to 0.3%. While the annual reading of the same index showed that deflation has narrowed to 0.9% compared to 1.6% in June, also beating expectations for a 1.1% contraction.

On the other hand, investors are currently waiting for the US economy to see the release of the aid requests index reading for the past week on August 8th, which may reflect a decrease of 66 thousand applications to 1,120 thousand applications compared to 1,186 thousand applications in the previous reading. Continuing for the past week at the beginning of this month, a decrease by 209 thousand requests to 15,898 thousand requests compared to 16,107 thousand requests in the previous reading.

This comes in conjunction with the disclosure of the import price index reading, which may indicate a slowdown in growth to 0.6% compared to 1.4% in June, while the annual reading of the same index may show a contraction of the decline to 1.7% compared to 3.8%. Otherwise, we followed yesterday expressing US House of Representatives Speaker Nancy Pelosi on the fact that the Republican and Democratic parties are still miles away in their negotiations over the virus relief package.

Technical analysis

The dollar versus yen pair shows some slight bearish tendency to approach the test of the support floor that it formed above 106.44 after breaching it previously, and we notice that the stochastic indicator begins to get rid of the negative momentum, while the SMA 50 provides positive support for the price.

Therefore, these factors encourage us to continue suggesting the bullish trend for the upcoming period, whose next target is at 107.68, while its continuation requires stability above 106.44.

The expected trading range for today is between 106.00 support and 107.50 resistance.

The expected general trend for today: Bullish.