USDJPY analysis 30.10.2020

The US dollar retreated during the Asian session to reflect the resumption of the rebound from its high since September 14 for the ninth session in seventeen sessions against the Japanese yen, following 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 07:27 AM GMT, the US dollar against the Japanese yen fell by 0.37% to 104.22 levels compared to the opening levels at 104.61, after the pair achieved its lowest level during the session’s trading at 104.13, while it achieved its highest at 104.63

We 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 Tokyo Consumer Price Index, which showed a contraction of 0.3% against a growth of 0.2% last September, contrary to expectations that indicated stability at zero levels. While the annual core reading of the index, which excludes food, the contraction widened to 0.5%, in line with expectations versus 0.2%.

In the same context, the core reading of the Tokyo Consumer Price Index excluding food and energy showed a 0.2% contraction against stability at zero levels in September, outperforming the expectations that indicated a 0.3% contraction, and this came in conjunction with the release of the unemployment rate index reading, which showed stability. At 3.0% in September, beating expectations for a rise to 3.1%.

We also monitored the second largest industrial country in Asia and the third largest industrial country in the world, revealing industrial sector data with the release of the preliminary industrial production reading, which showed an acceleration of growth to 4.0% compared to 1.0% in August, beating expectations of 3.0%, while the reading indicated The annual decline for the same index narrowed to 9.0% compared to 13.8% in the month of August, contrary to expectations that indicated a decrease in the decline to 7.2%.

Up to the disclosure of housing market data, with the release of the annual reading of the Housing Starts Index, which showed a widening decline to 9.9% compared to 9.1% in August, contrary to expectations that indicated a contraction of the decline to 8.6%, otherwise, yesterday Japanese Prime Minister Yoshihide expressed Suga said that he will work to strengthen the budget to support the economy of his country, which has been exhausted by the Corona pandemic, according to Reuters news agency.

On the other hand, investors are currently awaiting the US economy to unveil data on personal spending and income, which may reflect the stability of personal spending growth at 1.0% in September, and an increase in personal income of 0.3% compared to a decline of 2.7% in August. Core PCE growth slowed to 0.3%, from 0.2% in August.

This also comes in conjunction with the disclosure of the unit labor cost index reading, which may reflect the stability of growth at 0.5% during the third quarter, and before we witness the disclosure of the industrial sector data for the largest industrial country in the world with the release of the Chicago PMI reading, which may reflect the contraction of the expansion. To a value of 58.2, compared to 62.4 last September.

Up to the disclosure of the final reading of the University of Michigan Consumer Confidence Index, which may confirm an expansion of 81.2, unchanged from the previous initial reading for the current month, and an expansion of 80.4 in September, with the release of consumer expectations for inflation for the month of October. / October for one year and for the next five years.

Technical analysis

The dollar against the yen made an attempt to breach the resistance of the descending intraday channel that appears in the image, but we notice that the EMA50 formed a strong resistance barrier against the positive attempts, pushing the price down again, motivated by the negativity that is clearly visible through the stochastic indicator.

Thus, we will maintain our expectations for the downside move for the upcoming period, which depends on stability below 105.20, reminding you that our next main target is at 103.65.

The expected trading range for today is between 103.60 support and 105.00 resistance.

The expected general trend for today: Bearish.