JPYUSD analysis 16.09.2020

The US dollar fluctuated in a narrow range that tends to decline during the Asian session, to witness its lowest since August 28 against the Japanese yen after the economic developments and data that they followed on the Japanese economy and on the cusp of economic developments and data expected today, Wednesday, by the US economy, which include the proceedings of the committee meeting Federal Reserve Open Market, before the upcoming press conference of Federal Reserve Governor Jerome Powell.

At exactly 06:50 am GMT, the US dollar against the Japanese yen fell by 0.09% to 105.35 levels, compared to the opening levels at 105.44, which is the highest level for the pair during the session's trading, while the pair achieved its lowest level in three weeks at 105.25.

We have followed up on the Japanese economy the release of the Trade Balance Index reading, which showed the surplus widening to a value of 248.3 billion yen compared to 11.6 billion yen last July, in contrast to expectations that indicated a deficit of 37.5 billion yen. A value of 0.35 trillion yen, compared to 0.04 trillion yen in July, also beating expectations that the surplus would narrow to 0.01 trillion yen.

This came with the annual reading of exports showed that the decline decreased to 14.8% compared to 19.2% in the previous annual reading for the month of July, surpassing expectations that indicated a contraction of the decline to 16.1%. The previous annual month of July / July, contrary to expectations that indicated a contraction of the decline to 18.0%.

On the other hand, investors are currently awaiting the US economy, the largest economy in the world, to reveal a reading of retail sales, which represents about half of consumer spending, which accounts for more than two-thirds of the US GDP, and which may reflect a slowdown in growth to 1.1% compared to 7.5% in July. In July, the core reading of the retail sales index may also show growth slowing to 1.0% from 1.9% in July.

This comes before the largest industrial country in the world witnesses the disclosure of industrial sector data with the release of the final reading of the wholesale inventories index, which may show a 0.2% rise compared to a 1.1% decline last June, coinciding with the disclosure of housing market data with the release of The housing index reading by the National Association of Home Builders may reflect stability at a value of 78 this September.

This coincides with the proceedings of the Federal Open Market Committee meeting September 15-16 via satellite in Washington, during which the short-term reference rates for the fifth meeting in a row are expected to remain at between zero and 0.25%, and to reveal the expectations of the committee members. Federal Reserve rates of growth, inflation and unemployment in addition to the future of interest rates for the next three years.

Later today, markets are looking forward to the activities of the upcoming press conference of Federal Reserve Governor Jerome Powell, which he will hold half an hour after the end of the meeting to comment on the decisions of the committee that recently adopted several stimulus programs to support the economy in the face of the repercussions of the Corona pandemic, and it is mentioned that Powell recently announced the adoption of Fed to new inflation policy and average targeting of 2% inflation for some time.

Technical analysis

The dollar versus yen pair succeeded in reaching our main waited target at 105.20 and settling there, and is under constant negative pressure coming from the EMA50, to support the chances of breaking this level and opening the way for an extension of the bearish wave in the short and medium-term, heading towards 103.65 as a next negative target.

Consequently, we will continue suggesting the bearish trend for the upcoming period, noting that failure to break 105.20 will push the price to achieve intraday gains and visit 106.44 areas again before any new attempt to decline.

The expected trading range for today is between 104.50 support and 105.90 resistance.

The expected general trend for today: Bearish.