JPYUSD analysis 17.08.2020

The US dollar fluctuated in a narrow range that tends to decline during the Asian session, to witness its retracement of the third session from its high since July 23 against the Japanese yen after the developments and economic data that we followed about the Japanese economy before the developments and the economic data expected today, Monday, by the US economy. The world economy and in the shadow of escalating tensions between the United States and China, the two largest economies in the world.

At 06:50 am GMT, the US dollar against the Japanese yen declined by 0.03% to 106.58 levels compared to the opening levels at 106.61 after the pair achieved its lowest level during the session's trading at 106.46, while it achieved its highest at 106.68, knowing that The pair started the session on a rising gap after ending last week’s trading at 106.60 levels.

We have followed up by the Japanese economy, the second largest in Asia and the third largest in the world, the release of the GDP index reading, which showed the expansion of the contraction to 7.8% compared to 0.9% in the last first quarter, worse than expectations that indicated the expansion of the contraction to 7.5%, as well. The annual reading of the same index showed that the contraction widened to 27.8%, reflecting the worst ever, versus 2.2%, also worse than expectations for a 27.2% contraction.

In the same context, the GDP index reading measured by prices showed an acceleration of growth to 1.5% compared to 0.9% in the first quarter, below expectations that indicated an acceleration of growth to 1.9%, and this came before we witnessed the disclosure of industrial sector data for the third largest industrial country in The world with the release of the energy utilization rate, which showed an increase of 6.2%, compared to a decline of 11.6% last May.

This coincided with the release of the final reading of the Industrial Production Index, which reflected a slowdown in growth to 1.9% compared to the previous preliminary reading for the month of June and expectations of 2.7% and compared to a decline of 8.9% in May, while the annual reading of the same index showed a widening decline to 18.2% against 17.7% in the previous annual reading for the month of May.

On the other hand, investors are currently awaiting the US economy, the largest industrial country in the world, for the release of the New York industrial index reading, which may reflect a contraction of the expansion to a value of 14.6 compared to 17.2 in July, and this comes before we witness the disclosure of housing market data with the release of A housing index reading by the National Association of Home Builders may reflect a rise to a value of 74 versus 72 in July.

Technical analysis

The dollar-yen pair returns to decline to test the pivotal support floor at 106.44, which requires attention from upcoming trades, as the price needs to consolidate above this level so that the positive scenario remains valid for the upcoming period.

The stochastic oscillator is now providing clear positive signs, in addition to the SMA 50 providing support for the price from below, and therefore, these factors encourage us to continue suggesting the bullish trend in the intraday and short term, whose next target is at 107.68, noting that a break of 106.44 will set The price is under negative pressure, its targets start with testing the 105.20 areas.

The expected trading range for today is between 106.00 support and 107.40 resistance.

The expected general trend for today: Bullish.