USDJPY analysis 14.08.2020

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 after the developments and economic data that they followed on the Japanese economy and on the cusp of economic developments and data expected today, Friday, by the US economy The largest economy in the world.

At exactly 07:59 am GMT, the US dollar against the Japanese yen declined by 0.07% to 106.85 levels compared to the opening levels at 106.93 after the pair achieved its lowest level during the session's trading at 106.84, while it achieved its highest at 107.04.

The Japanese economy, the second largest in Asia and the third largest in the world and the third largest industrialized country in the world after both the United States and China, has followed up on the disclosure of industrial sector data, with the release of the Tertiary Industrial Index, which showed an increase of 7.9% compared to a decline of 2.9% in May / Last May, it beat expectations of a 6.4% rise.

On the other hand, investors are currently awaiting the US economy to unveil a reading of retail sales, which represents about half of consumer spending, which represents more than two-thirds of the United States' GDP, and which may reflect slowing growth to 2.0% compared to 7.5% in June, as may The core reading of the same index shows growth slowed to 1.3%, from 7.3% in June.

This comes in conjunction with the release of the preliminary reading of the single labor cost index, which reflects an acceleration of growth to 6.5% compared to 5.1% in the first quarter, while the preliminary reading of the productivity of non-agricultural sectors may show a 1.5% rise against a 0.9% decline, and before we witness the disclosure of industrial sector data. For the largest industrialized country in the world, with the release of the Industrial Production Index, which may reflect a slowdown in growth to 3.1%, compared to 5.4% in June.

This coincides with the release of the energy utilization rate index reading, which may indicate an acceleration of growth to 70.3% compared to 68.6% in June, leading to the disclosure of the preliminary reading of the University of Michigan Consumer Confidence Index, which may show a contraction of the expansion to a value of 72.0 compared to 72.5 in July. In July, in conjunction with the final reading of the wholesale stocks index showed the decline narrowed to 1.1% from 2.3% in May.

Other than that, the markets are looking forward to the upcoming trade talks between Washington and Beijing tomorrow, Saturday, via satellites, which aim to review the officials of the two largest economies and two industrialized countries in the world, for the implementation of the first phase of their trade agreement, especially after the significant escalation of tensions between Washington and Beijing recently. In conjunction with the start of the countdown to the next US presidential elections, by next November.

Technical analysis

The dollar against the yen pair resumed its positive trading after the temporary decline it witnessed yesterday, approaching the 107.00 barrier, which maintains our expectations for the bullish trend valid in the intraday and short term, supported by the SMA 50 that carries the price from below, noting that our next target is at 107.68.

Note that the continuation of the suggested bullish wave depends on stability above 106.44.

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

The expected general trend for today: Bullish.