USDJPY analysis 07.10.2020

The US dollar fluctuated in a narrow range that tends to rise during the Asian session, to witness its rebound for the second session in four sessions from its lowest since September 23 against the Japanese yen, following developments and economic data that they followed on the Japanese economy, which included the speech of the Governor of the Bank of Japan Haruhiko Kuroda and on The cusp of economic developments and data expected today, Wednesday, by the US economy, the largest economy in the world, which includes speeches by members of the Federal Open Market Committee.

At 06:50 am GMT, the US dollar against the Japanese yen rose by 0.10% to 105.74 levels compared to the opening levels at 105.64, after the pair achieved its highest level during the session's trading at 105.76, while the pair achieved its lowest level at 105.61.

We also watched, as Bank of Japan Governor Haruhiko Kuroda gave a speech via satellite under the title "Covid-19 and the Global Economy: Impact and Challenges" at the annual meeting of the National Association of Business Economics, and this came before we also witnessed by the Japanese economy the disclosure of the preliminary reading of the leading indicators which It showed that growth accelerated to a value of 88.8 compared to 86.7 in July, contrary to expectations, which indicated an expansion to 89.2.

On the other hand, the US economy awaits the markets, a member of the Federal Open Market Committee and the President of the Minneapolis Federal Reserve, Neil Kashkari, about racism and the economy in a hypothetical series of events, and this comes before the Fed unveiled the minutes of the Federal Open Market Committee meeting held on 15 - September 16th, during which interest rates were kept between zero and 0.25%.

In the same context, the Federal Reserve revealed at the time the expectations of members of the Federal Commission for growth rates, inflation and unemployment in addition to the future of interest rates for the next three years, and it is mentioned that the Federal Reserve had previously adopted several stimulus programs until the economy showed signs of recovery, on top of which is the bond-buying program. Treasury at $ 80 billion a month and mortgage bonds at least $ 40 a month.

We also followed the press conference held by Federal Reserve Governor Jerome Powell after the end of the meeting to comment on the decisions and directions of the committee, which included expectations to remain the leader at zero levels until late 2023, in which he expressed the importance of the fiscal stimulus policy to support the economy, amid his assertion of commitment The Federal Reserve is using all its tools to support the recovery.

All the way to the talk of a member of the Federal Open Market Committee and the President of the New York Federal Reserve, John Williams, about targeting the average flexible inflation at an online event hosted by the Hoover Economic Policy Group, and this comes hours after Fed Governor Powell's call on Tuesday for continued strong fiscal and monetary stimulus For the sake of the economic recovery that he declared "there is a long way to go".

Technical analysis

The dollar versus yen pair did not show any strong movement in the past sessions, and continues to fluctuate around the EMA50, which keeps our bullish expectations valid unchanged, which target a test of 106.44 initially, reminding you of the importance of holding above 105.20 for the continuation of the suggested rise.

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

The expected general trend for today: Bullish.