USDJPY analysis 08.09.2020

The US dollar fluctuated in a narrow range, tilted towards a decline during the Asian session against the Japanese yen, following the developments and economic data that were followed by the Japanese economy and on the cusp of economic developments and data expected today, Tuesday, by the US economy, the largest economy in the world.

At exactly 07:05 GMT, the US dollar against the Japanese yen fell by 0.01% to 106.26 levels compared to the opening levels at 106.27, after the pair achieved its lowest level during the session's trading at 106.24 while achieving its highest at 106.31.

The Japanese economy, the second largest in Asia, followed the release of the annual household spending index, which showed a widening decline to 7.6% compared to 1.2% last June, worse than expectations that indicated a widening decline to 3.6%. This coincided with the annual average income reading showed that the decline narrowed to 1.3% compared to 2.0% in June, beating expectations that indicated the decline to 1.6%.

We also monitored the Japanese economy, the release of the current account index reading, which showed a contraction of the surplus to a value of 0.96 trillion yen compared to 1.05 trillion yen in June, worse than expectations that indicated a widening of the surplus to 1.44 trillion yen, while the seasonally unadjusted reading of the index itself showed a widening The surplus amounted to 1,468 billion yen, compared to 168 billion yen in June, below expectations that the surplus would widen to 1,869 billion yen.

This came with the release of the final seasonally adjusted GDP reading, which showed a contraction of 7.9% compared to a contraction of 7.8% in the preliminary reading for the second quarter and compared to a contraction of 0.6% in the first quarter last, surpassing expectations that indicated a widening of the contraction to 8.1%, while the annual final reading indicated The same index measured by prices has a growth of 1.3% compared to the preliminary reading and expectations of 1.5% growth and 0.9% growth in the first quarter.

The Japanese Cabinet Office revealed a reading of Eco Watchers’s statistics on current and future conditions, which showed a contraction of current conditions to a value of 43.9 compared to 41.1 in July, surpassing expectations that indicated the expansion of contraction to 41.0. A value of 42.4 compared to 36.0 in July, also contrary to expectations that indicated the expansion of the contraction to 28.2.

On the other hand, investors are waiting for the US economy to unveil the consumer credit index reading, which may reflect an increase to $ 12.9 billion compared to $ 8.9 billion last June. Otherwise, according to the latest figures issued by the World Health Organization, the number of cases has increased. Coronavirus-infected more than 27 million people and 881,464 people have died in 216 countries.

Technical analysis

The dollar versus the yen did not show any strong movement yesterday, to remain stable below 106.44, while the stochastic indicator lost its positive momentum significantly, which supports expectations for the continuation of the bearish trend for the coming period, whose next main target is at 105.20, while it represents stability below 106.44 An important condition for its continuation.

The expected trading range for today is between 105.60 support and 106.70 resistance.

The expected general trend for today: Bearish.