JPYUSD analysis 31.08.2020

The US dollar fluctuated in a narrow, bullish range during the Asian session against the Japanese yen, following the developments and economic data that were followed on Monday by the Japanese economy, and amid scarce economic data early this week by the US economy, the largest economy in the world.

At exactly 06:50 am GMT, the US dollar against the Japanese yen rose by 0.10% to 105.57 levels compared to the opening levels at 105.46 after the pair achieved its highest level during the session's trading at 105.80, while it achieved the lowest level at 105.30. The pair started the session on a rising gap after ending last week’s trading at 105.37 levels.

We have followed up on the Japanese economy, the third largest economy in the world and the third largest industrialized country in the world, the release of the preliminary industrial production reading, which showed an acceleration of growth to 8.0% compared to 1.9% last June, surpassing expectations that indicated an acceleration of growth to 5.0%, while The annual reading of the same index showed a contraction of the decline to 16.1% compared to 18.2% in June, worse than expectations for a contraction of the decline to 15.7%.

This coincided with the disclosure of the seasonally adjusted reading of the retail sales index, which showed a decline of 3.3% against a rise of 13.1% in June, worse than expectations that indicated a slowdown in growth to 8.0%, while the annual reading of the same index showed the widening of the decline to 2.8% compared to 1.3. % In June, also worse than expectations, which indicated a widening decline of 1.7%.

Up to the release of the consumer confidence reading, the contraction expanded to a value of 29.3 compared to 29.5 last July, surpassing expectations of 28.7, in conjunction with the disclosure of housing market data with the release of the annual reading of the housing starts index, which showed a decline in the decline to 11.4% compared to 12.8% in June, beating expectations for a narrowing of the decline to 12.0%.

Other than that, Japan is still looking for a new prime minister to succeed the Japanese prime minister, who last Friday suddenly announced his resignation for health reasons, and in another context, Bank of Japan Governor Haruhiko Kuroda also indicated Friday that he plans to complete his full term. It ends in 2023 with the assurance that the Bank of Japan will maintain its monetary policy even as Japanese Prime Minister Abe resigns.

On the other hand, markets are looking forward to the speech of a member of the Federal Open Market Committee and Deputy Governor of the Federal Reserve, Richard Clarida, who is scheduled to participate in a hypothetical discussion on monetary policy hosted by the Peterson Institute for International Economics, and this comes in the wake of the Federal Reserve’s announcement on the sidelines of the Jackson Hole meetings adopting a policy New for inflation and average inflation targeting two percent above for some time.

Technical analysis

The dollar versus yen pair continued to decline to touch the negative target suggested in our recent technical update at 105.20, and fluctuate near this level, to fall under expected negative pressure during the coming period, waiting for the aforementioned level to be broken to confirm the continuation of the downside trend in the intraday and short term, whose next target reaches 103.65. .

Therefore, the bearish bias will be expected today, supported by moving below SMA 50, bearing in mind that failure to achieve the required break will push the price to test 106.44 areas again before any new attempt to decline.

The expected trading range for today is between 104.70 support and 106.00 resistance

The expected general trend for today: Bearish