USDJPY analysis 19.08.2020

The US dollar fluctuated in a narrow range slanting to an upside during the Asian session, to witness its rebound from its lowest since late July, when it tested its lowest since March 12 against the Japanese yen after developments and economic data that we followed on the Japanese economy before economic developments and data. Expected Wednesday by the US economy, the largest economy in the world, and in the shadow of escalating tensions between Washington and Beijing.

At 07:16 AM GMT, the US dollar against the Japanese yen rose by 0.09% to 105.51 levels compared to the opening levels at 105.41, after the pair achieved its highest level during the session's trading at 105.61, while it achieved its lowest level in three weeks at 105.10.

The Japanese economy followed up on the release of the trade balance index reading, which showed a surplus of 11.6 billion yen compared to a deficit of 269.3 billion yen last June, in contrast to expectations that indicated a narrowing of the deficit to 77.6 billion yen, while the seasonally adjusted reading of the same index showed a contraction The deficit to 34.8 billion yen, compared to 410.9 billion yen in June, also beating expectations that the deficit would widen to 0.44 trillion yen.

This came with the annual reading of exports showed that the decline decreased to 19.2% compared to 26.2% in June, surpassing expectations that indicated a contraction of the decline to 21.0%, while the annual import reading showed the widening decline to 22.3% compared to 14.4%, contrary to expectations that indicated an expansion The decline to 22.3%, and this coincided with the machinery orders index reading showing a 7.6% decline versus a 1.7% rise in May, worse than expectations for a 2.1% rise.

On the other hand, investors are currently awaiting the US economy. The Federal Reserve unveiled the minutes of the Federal Open Market Committee meeting held on July 28-29 in which monetary policy makers at the Federal Reserve Bank at the time kept the short-term reference interest rates at Zero levels are between zero and 0.25%.

It is noteworthy that Federal Reserve Governor Jerome Powell stressed in the press conference held after the meeting at the time that the Fed was committed to using all its tools to support the recovery and reduce the negative repercussions of the Corona pandemic, and according to the latest figures issued by the World Health Organization, the number of cases infected with the Coronavirus increased to nearly 21.76 million and 771,635 died. People killed in 216 countries. 

Technical analysis

The dollar versus the yen succeeded in touching our first awaited target at 105.20, and there is some slight bullish bias affected by the positivity of the stochastic indicator, while the SMA 50 represents negative pressure against the price.

In general, we expect the overall bearish trend to continue to dominate the upcoming trades, and the price needs to break 105.20 to confirm the extension of the downside wave towards 103.65, bearing in mind that failure to achieve the required break will lead the price to achieve intraday gains and test 106.44 before any new attempt to decline.

The expected trading range for today is between 104.80 support and 106.00 resistance.

The expected general trend for today: Bearish.