USDJPY analysis 18.09.2020

The US dollar fluctuated in a narrow range that tends to rise during the Asian session, to witness its retracement of the second session from its lowest since late July, when it tested its lowest since March 12 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 on Friday by the US economy, the largest in the world.

At 06:50 am GMT, the US dollar against the Japanese yen rose by 0.04% to 104.78 levels compared to the opening levels at 104.74, after the pair achieved its highest level during the session’s trading at 104.87, while it achieved the lowest level at 104.68.

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 a slowdown in growth to 0.2% compared to 0.3% in July, contrary to expectations that indicated an acceleration of growth to 0.6%, while the annual reading of the same index explained the exception Of which fresh food is a contraction of 0.4%, in line with expectations versus stability at zero levels in the previous annual reading.

In the same context, the annual CPI reading, excluding energy and fresh food, reflected the slowdown in growth to 0.2% compared to the previous annual reading for July and expectations of 0.4%, and this comes hours after the decision of monetary policymakers at the Bank of Japan to stay on interest rates Negative at 0.10%, and the BoJ unveiled its monetary policy statement.

On the other hand, investors in the US economy are awaiting the release of the current account reading, which may reflect the widening of the deficit to $ 158 billion compared to $ 104 billion in the first quarter, before we witness the release of the leading indicators reading, which may reflect a slowdown in growth to 1.3% versus 1.4%. In July, coinciding with the disclosure of the preliminary reading of the University of Michigan Consumer Confidence Index, which may show an expansion to 75.0 versus 74.1 in August.

This comes hours after the expiry of the FOMC meeting September 15-16, during which interest rates were kept between zero and 0.25%, the program to purchase Treasury bonds by $ 80 billion per month and mortgage bonds by $ 40. At least monthly, and the disclosure at the time of the expectations of members of the Federal Commission for growth rates, inflation and unemployment in addition to the future of interest rates for the next three years.

In the same context, last Wednesday, we followed the press conference held by Federal Reserve Governor Jerome Powell after the end of the meeting to comment on the decisions and directions of the committee, which included expectations to remain the leader at zero levels until at least 2023, in which he expressed the importance of the fiscal stimulus policy to support The economy is confirming the Federal Reserve’s commitment to using all its tools to support the recovery.

Technical analysis

The dollar versus the yen provided negative trades to move away from 105.20, reinforcing expectations that the bearish trend will continue during the upcoming sessions, which targets 103.65 as a next major stop, noting that the SMA 50 continues to support the suggested descending wave.

The current positivity of the stochastic oscillator may cause some temporary sideways fluctuation before resuming the expected decline, which will remain valid as long as 105.20 is not breached and stability above it.

The expected trading range for today is between 104.00 support and 105.40 resistance.

The expected general trend for today: Bearish.