USDJPY analysis 18.08.2020

The US dollar fell during the Asian session, to witness its rebound to the fourth session from its highest since July 23 against the Japanese yen amid scarcity of economic data by the Japanese economy and before economic developments and data expected today, Tuesday, by the US economy, the largest economy in the world, and in the shadow of escalating tensions The United States and China are the two largest economies in the world.

At exactly 06:51 am GMT, the US dollar against the Japanese yen declined by 0.39% to 105.59 levels compared to the opening levels at 106.01, after the pair achieved its lowest level since the seventh of August at 105.57, while it achieved its highest level during the trading session. At 106.05.

Investors are currently awaiting the US economy to unveil the housing market data with the release of both the Housing Starts Index and the Building Permit Index, and amid expectations that the building permit reading will reflect an increase to about 1.33 million permits, compared to about 1,226 million permits last June. The home start-up reading may reflect an increase to about 1.23 million homes, compared to about 1.19 million homes in June.

Other than that, we followed yesterday the US Secretary of Commerce Wilbur Ross expressed that trade talks between Washington and Beijing are still continuing, and that his country is keen to call on China to go ahead with the purchase of American agricultural products, while referring to the fact that the US administration is working to fill the gaps to prevent the Chinese company Huawei from Access to American technology, and this came after US President Donald Trump's administration tightened additional restrictions on Huawei.

Technical analysis

The dollar against the yen pair achieved a strong break of 106.44 to return to the downside path again, as it approaches the first negative target at 105.20, which makes us expect to witness a further decline in the coming sessions, noting that exceeding the mentioned level will lead the price to incur additional losses that reach To 103.65.

Moving below the SMA 50 supports the bearish expectations, which will remain valid unless the price rallies to breach 106.44 and stabilize above it.

The expected trading range for today is between 104.80 support and 106.40 resistance.

The expected general trend for today: Bearish.