JPYUSD analysis 25.09.2020

The US dollar fluctuated in a narrow range that tends to decline during the Asian session, to witness its rebound from the high since September 15 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, Friday, by the US economy, the largest economy. In the world.

At exactly 07:11 AM GMT, the US dollar against the Japanese yen decreased by 0.09% to 105.31 levels, which is the lowest level for the pair during the session's trading, compared to the opening levels at 105.41, while the pair achieved its highest level in a week at 105.54.

We have followed up on the Japanese economy, the second largest in Asia and the third largest in the world, revealing inflation data, with the release of the annual service price index reading by the Bank of Japan for August, which showed a slowdown in the pace of growth to 0.1% compared to 1.1%, which was revised from a growth of 1.2 % In the previous annual reading last July, contrary to expectations that indicated a growth of 1.2%.

On the other hand, investors are currently awaiting the US economy to unveil the durable goods orders index, which represents about half of consumer spending, which represents more than two-thirds of the gross domestic product in the United States, and which may reflect a slowdown in the pace of growth to 1.1% compared to 11.4% in July. July, and the core reading of the same index may show a slowdown in the pace of growth to 1.0%, from 2.6% in July.

Later today, markets are looking forward to a speech by the President of the New York Federal Reserve and a member of the Federal Open Market Committee, John Williams, about the labor market in light of the Corona pandemic at a webinar hosted by the University of Rochester, and this comes hours after the expiration of the semi-annual testimony of Federal Reserve Governor Jerome in front of The US Congress has both the House Financial Services Committee and the Senate Banking Committee.

Powell stated that about $ 195 billion was provided in the Aid, Relief and Economic Security Bill in the face of the repercussions of the "CARES Act" in order to confront the negative repercussions of the Corona pandemic so far, while expressing that small and medium companies need more support for a longer period than He postponed its return to what it was before the health crisis, and touched on the fact that the Federal Reserve continues to support the economy in these unprecedented situations.

Powell noted that the Federal Reserve did not provide any loans to large companies directly, while stating that he does not agree with the raising of local state governments taxes during the current period and that the Fed will continue with the wage protection program if it obtains congressional approval, amid his refusal to comment on talks The poles of US policy, the Republican Party and the Democratic Party, about the second anticipated stimulus package in the markets.

In the same context, Powell stressed that failure to approve more stimulus will significantly harm companies and families, especially in light of the continuing downside risks to the American economy, explaining that he believes that Congress should use $ 130 billion to support the wage protection program, with reference to the availability of a vaccine. Corona will enhance the state of certainty in the markets and among families and companies.

In another context, Powell noted that the Federal Reserve's maintenance of short-term reference interest rates is zero aimed at supporting economic activity and strengthening inflationary pressures towards the 2% target, and that achieving this will push it to raise interest on federal funds later, adding that in the short term, the interest rate on funds will not be zero. Federalism is good for people, but citizens will feel the importance of low interest in the medium and long term.

Technical analysis

The dollar-yen pair stabilizes trading above 105.20, which maintains the bullish trend scenario valid and effective, supported by the move above the 50 MA, waiting to visit 106.00 - 106.44 levels, which represent our next main targets.

Consolidation above 105.20 is important for the continuation of the expected rise, as breaking it will pressure the price to resume the main bearish trend again.

The expected trading range for today is between 104.80 support and 106.20 resistance.

The expected general trend for today: Bullish.