USDJPY analysis 02.10.2020

The US dollar fell during the Asian session, to witness its rebound for the second session in three sessions from its highest 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. And in the midst of the markets ’evaluation of the developments of the Congress’s arrival to the stimulus package and the severity of the second wave of the Corona virus.

At exactly 06:56 am GMT, the US dollar against the Japanese yen declined by 0.53% to 104.97 levels, after the pair achieved its lowest level since the 23rd of this month at 104.94, while the pair achieved its highest during the session's trading at 105.67.

We followed up on the Japanese economy, the release of the unemployment rate reading, which showed a rise to 3.0%, in line with expectations, compared to 2.9% in July, and this came before the annual reading of the monetary base index showed that growth accelerated to 14.3% compared to 11.5% in August, surpassing Expectations are for a growth of 11.9%, and the release of the consumer confidence reading, which indicated a contraction of the contraction to 32.7 from 29.3 in August, beating expectations of 31.6.

On the other hand, investors are currently awaiting the US economy to disclose labor market data, with the release of the employment change index reading for the sectors other than agricultural, which may reflect 900,000 jobs added compared to 1,371,000 jobs added last August, while the average index reading may indicate Hourly income growth accelerated to 0.5% from 0.4%. This is with the unemployment rate reading showing a decline to 8.2%, compared to 8.4% in August.

This comes in conjunction with the speech of a member of the Federal Open Market Committee and Chairman of the Philadelphia Federal Reserve, Patrick Harker, about the labor market in a webinar, and before we witness by the largest industrialized country in the world the disclosure of the factory orders index reading, which may show a slowdown in growth to 1.5% compared to 6.4% in July, coinciding with the release of the University of Michigan's index of consumer confidence and consumer expectations of inflation for the past month.

Other than that, we followed yesterday the approval of the US House of Representatives bill for a fiscal stimulus package worth $ 2.2 trillion supported by Democrats, but the bill was notably rejected by Republicans, and this came after the failure of talks between House Speaker Nancy Pelosi and the US Treasury Secretary Stephen Mnuchin, in order to reach a bipartisan agreement on the second stimulus package to face the repercussions of the Corona pandemic.

In another context, we have just followed his tweet by US President Donald Trump on Twitter, in which he expressed that the results of the Corona virus test for his help, Hope Hicks, were positive, and that he and First Lady Melania Trump are waiting for their test results and that they will start the quarantine process, according to the latest figures issued by the organization Global Health The number of HIV cases increased to more than 33.84 million, and 1,010,634 people were killed in 235 countries.

Technical analysis

The dollar versus the yen has shown sideways and narrow-range trading since yesterday, hovering around the resistance line that appears in the image, and it gets positive support from the MA 50, waiting for the bullish bias to resume to visit 106.44, which represents our main positive target.

Therefore, we will maintain our bullish expectations over the intraday term, reminding you that the continuation of the expected rise requires stability above 105.20.

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

The expected general trend for today: Bullish.