JPYUSD analysis 21.08.2020

The US dollar fluctuated in a narrow range that tends to decline during the Asian session, to witness its retracement to the fifth session in seven sessions 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, Friday before. The American economy is the largest in the world.

At exactly 07:54 am GMT, the US dollar against the Japanese yen decreased by 0.19% to 105.60 levels compared to the opening levels at 105.80, which is the highest level for the pair during the session's trading, while the pair achieved its lowest level during the session's trading at 105.56.

We followed up on the Japanese economy revealing inflation data with the release of the annual reading of the national consumer price index, which showed an acceleration of growth to 0.3% compared to 0.1% in the previous annual reading for the month of June, while the annual reading of the same index, excluding fresh food, showed the stability at levels Zero, little changed from the previous annual reading, below expectations of 0.1% growth.

In the same context, the annual CPI reading, excluding energy and fresh food, reflected the stability of growth at 0.4% in the previous annual reading for the month of June, and this came before we witnessed Markit's disclosure of the preliminary reading of the manufacturing PMI on Japan, which showed a contraction of To a value of 46.6 compared to 45.2 last July, contrary to expectations that indicated the expansion of the contraction to 45.0.

On the other hand, the markets are awaiting the release of the preliminary reading of the Markit Industrial and Service Purchasing Managers Index on America, which may reflect the expansion of the industrial sector in the largest industrial country in the world to 51.9 compared to 50.9 in July, and the service sector to 50.9 compared to 50.0, before The Existing Home Sales Index reading showed an increase of 14.7% to 5.40mn homes, compared to a 20.7% rise at 4.72mn in June.

Other than that, we followed, last Wednesday, the Federal Reserve’s disclosure of the minutes of the FOMC meeting held on July 28-29 in which monetary policymakers at the Federal Reserve addressed the fact that the current situation surrounding the Corona pandemic could "severely affect Economic activity, employment and inflation are in the near term and pose significant risks to the economic outlook in the medium term. "

Technical analysis

The dollar against the yen has resumed its negative trading noticeably, approaching our awaited target at 105.20, which maintains our bearish expectations valid for the upcoming period, supported by the negative pressure formed by the SMA 50, noting that breaking the aforementioned level will extend the downside wave to reach 103.65 as a major station deification.

On the other hand, we should note that the continuation of the bearish wave depends on stability below 106.44.

The expected trading range for today is between 104.80 support and 106.20 resistance.

The expected general trend for today: Bearish.