USDJPY analysis 23.09.2020

The US dollar fluctuated in a narrow range slanting to an upside during the Asian session, to witness its retracement for the third consecutive session from the 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 today, Wednesday, by the economy. The US Congress, which includes the testimony of Federal Reserve Governor Jerome Powell before the US Congress.

At 07:15 AM GMT, the US dollar against the Japanese yen rose by 0.18% to 105.12 levels compared to the opening levels at 104.93, after the pair achieved its highest level during the session's trading at 105.20, while it reached its lowest level at 104.88.

We have followed up on the disclosure of the preliminary reading of the manufacturing PMI by Markit on Japan, which showed the contraction of the deflation to a value of 47.3 compared to 47.2 in August, below expectations of 48.0, and this came before we witness the Japanese economy, the third-largest industrial country. Globally, the index of all industrial activities was released, which showed growth slowing to 1.3%, in line with expectations, compared to 6.8% in June.

On the other hand, investors are awaiting the American economy to reveal the housing market data with the release of the house price index reading, which may indicate a slowdown in growth to 0.4% compared to 0.9% last June, in conjunction with the speech of a member of the Federal Open Market Committee and the president of the Bank Cleveland Federal Reserve Loretta Meester at the Chicago Satellite Payments Symposium.

This comes before we witness the unveiling of the preliminary reading of the Markit Industrial and Service Purchasing Managers Index on America, which may reflect the shrinking of the industrial sector in the largest industrial country in the world to a value of 52.5 compared to 53.1 in the previous reading for August, and the expansion of the service sector to It was worth 54.5, compared to 55.0 in August.

Up to the testimony of Federal Reserve Governor Jerome Powell before the House Select Committee in Washington, and in conclusion, Vice Governor of the Federal Reserve and a member of the Federal Open Market Committee Randall Quarles is expected to speak about the economic outlook at the Institute of International Bankers via satellite. Yesterday it was reported that the ball is in the court of Congress to provide support to companies affected by the Corona pandemic.

Technical analysis

The dollar against the yen continued to rise to test the pivotal resistance 105.20, which constitutes a strong barrier against the price, accompanied by the stochastic indicator losing positive momentum and the appearance of clear overbought areas, while the MA 50 forms negative pressure against the price.

Thus, we believe that opportunities are available to bounce to the downside and resume the expected bearish trend in the intraday and short term terms, whose next main target is at 103.65, while achieving it requires stability below 105.20.

The expected trading range for today is between 104.30 support and 105.50 resistance.

The expected general trend for today: Bearish.