USDJPY analysis 01.10.2020

The US dollar fluctuated in a narrow range that tends to rise during the Asian session, to witness its rebound to the seventh session in nine sessions from 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 today, Thursday, before. The US economy is the largest economy in the world, which includes speeches by members of the Federal Open Market Committee.

At exactly 06:52 am GMT, the US dollar against the Japanese yen rose by 0.05% to 105.53 levels, after the pair achieved its highest level during the session's trading at 105.55, while the pair achieved its lowest level at 105.41.

We have followed up on the Japanese economy, the second largest in Asia and the third largest in the world, the disclosure of the Tankan Industrial Index reading, which showed a contraction of contraction to 27 compared to 34 in the last second quarter, worse than expectations that indicated a contraction of deflation to 23, as indicated by the Tankan service index reading. Deflation narrowed to 12 from 17 in the second quarter, also worse than expectations that indicated a contraction of deflation to 9.

This came before we also witnessed the second largest industrial country in Asia and the third largest industrial country in the world disclosure of industrial sector data with the release of the final reading of the Industrial Purchasing Managers Index by Markit from Japan, which showed a contraction of the contraction to a value of 47.7 compared to the initial reading of last month. Expectations are at 47.3 versus 47.2 in August.

On the other hand, investors are currently awaiting the US economy to unveil data on personal spending and income, which may reflect a slowdown in the growth of personal spending to 0.7% compared to 1.9% in July, and a decline of 2.0% in personal income compared to a rise of 0.4% in July. Meanwhile, the core PCE reading may indicate that growth remained stable at 0.3% in August.

This comes in conjunction with the release of the aid requests index reading for the past week on September 26th, which may reflect a decrease of 20 thousand requests to 850 thousand applications compared to 870 thousand applications in the previous weekly reading, and the reading of continuous aid requests for the past week may appear on 19 of The same month, a decrease of 355 thousand applications to 12,225 thousand applications compared to 12,580 thousand applications.

Up to the disclosure of the final reading of the Manufacturing PMI by Markit from the United States, which may reflect the stability of the expansion at a value of 53.5, unchanged from the initial reading for the past month and compared to 53.1 in August, before we also witness the American economy the release of The construction spending index reading, which shows growth accelerating to 0.8%, compared to 0.1% in July.

This comes in conjunction with the disclosure by the largest industrialized country in the world of a reading of the Industrial Supply Institute index, which may show that the expansion has stabilized at a value of 56.0 without little change than it was in the previous reading for the month of August, while the reading of the same index measured by prices may indicate that the breadth has decreased This amounted to 59.0 versus 59.5 in August.

Markets are also looking forward to the FOMC members ’speech, as New York Federal Reserve Chairman John Williams will deliver opening remarks at the New York Federal Reserve’s research conference on FinTech, before we witness Fed Deputy Governor Michael Bowman participating in a panel discussion. Titled "The Important Role of Community Banks in Ensuring Urgent Access to Mortgage Credit" in Montana.

Technical analysis

The dollar versus yen pair faced slight negative pressure yesterday to move around the breached resistance line, noting that the SMA 50 provided good positive support for the price, while the stochastic indicator got rid of its negative momentum, reaching the oversold areas now.

Thus, these factors encourage us to continue favoring the bullish trend for the upcoming period, which mainly targets 106.44, reminding you of the importance of holding above 105.20 to continue the expected rise.

The expected trading range for today is between 105.00 support and 106.44 resistance.

The expected general trend for today: Bullish.