USDJPY analysis 05.10.2020

The US dollar fluctuated in a narrow, bullish range during the Asian session, as we witnessed its retracement of the second session from its lowest since September 23 against the Japanese yen amid scarcity of economic data early this week by the Japanese economy.

And on the cusp of economic developments and data expected today, Monday, by the US economy, the largest economy in the world, and amid market assessments of the developments in the health of US President Donald Trump and developments related to the upcoming US stimulus package.

At exactly 06:53 am GMT, the US dollar against the Japanese yen rose by 0.22% to 105.57 levels compared to the opening levels at 105.34, after the pair achieved its highest level during the session's trading at 105.61, while the pair achieved its lowest level at 105.28, with Knowing that, the pair started the session with a rising gap, after ending last week’s trading at 105.29 levels.

Investors are currently awaiting the market is looking to reveal the final reading of the Institute of Service Provisioning Index by Markit on the United States, which may reflect the stability of the expansion at a value of 54.6, with little change from what it was in the preliminary reading for the past month and compared to an expansion of 55.0 last August.

This comes before the US economy witnessed the release of the Institute for Service Provision Index reading, the importance of which lies in the fact that the service sector accounts for more than two-thirds of the US gross domestic product, which may explain the contraction of the expansion to a value of 56.3 compared to 56.9 in August.

Technical analysis

The dollar versus yen pair was subjected to negative pressure in the past sessions to attack 105.20, but it quickly rebounded to settle above the EMA 50, which keeps the bullish trend scenario valid and effective for the upcoming period, which mainly targets 106.44.

Note that stability above 105.20 is important for the expected upside move to continue.

The expected trading range for today is between 105.00 support and 106.30 resistance.

The expected general trend for today: Bullish.