USDJPY analysis 05.11.2020

The US dollar fluctuated in a narrow range that tends to decline during the Asian session, to witness its rebound for the second session from its highest since October 21 against the Japanese yen amid a scarcity of economic data by the Japanese economy and on the cusp of economic developments and data expected today, Thursday, by the largest US economy An economy in the world, which includes the meeting of the Federal Open Market Committee and the continued counting of the American voters' votes in the 2020 US presidential elections.

At exactly 06:58 am GMT, the US dollar against the Japanese yen declined by 0.20% to 104.31 levels compared to the opening levels at 104.52, after the pair achieved its lowest level during the session’s trading at 104.22, while it reached its highest at 104.54.

Investors are currently looking forward to the US economy, the release of the aid claims index reading for last week in late October, which may reflect a decrease of 11,000 requests to 740,000 requests compared to 751,000 requests in the previous reading, and the reading of the continuing aid requests for last week may also appear. On the 24th of last month, a decrease of 556 thousand applications decreased to 7.2 million, compared to 7,756 thousand applications in the previous reading.

This comes in conjunction with the disclosure of the preliminary reading of the non-agricultural sector productivity index, which reflects a slowdown in growth to 3.6% compared to 10.1% in the last second quarter, while the preliminary reading of the labor cost index may show a decrease of 10.0% compared to a rise of 9.0% in the second quarter. This coincided with the November 4-5 FOMC meeting via satellite in Washington.

During the current meeting, monetary policymakers at the Federal Reserve Bank are expected to keep interest rates at the lowest ever, between zero and 0.25%, before we witness the press conference that Fed Governor Jerome Powell will hold half an hour after the meeting has ended to comment. On the decisions and directions of the committee that previously approved many stimulus programs to support the economy in the face of the repercussions of the Corona pandemic.

Otherwise, we would like to point out that the preliminary indications for the US elections currently reflect the Democratic candidate, Joe Biden, winning 264 electoral votes, while the forty-fifth US president, Republican Donald Trump, got 214, and we would like to point out that winning the White House requires that the candidate for the post of President of the United States win 270 electoral votes. At least out of 538 electoral votes representing 50 states of the United States of America.

In the same context, and in view of the results of the US congressional elections, the Republican Party won about 48 seats in the Senate and the Democratic Party won about 46 seats, while other parties won two seats, out of 100 seats. For one of the poles of American politics, the Democratic Party Or his Republican counterpart on the majority in the Senate requires winning about 51 seats.

As for the House of Representatives, the Democrats won 204 seats while the Republicans won 190 seats out of 435 seats, and it takes to win a majority of the House one party to get 218 seats, and the vote count of the American electorate is still ongoing amid global follow-up to that event, which will determine the orientations and policies of the states. United political and economic development in the next four years, which will be reflected in one way or another on politics and the global economy.

Technical analysis

The dollar against the yen bounced down sharply, after testing the 105.20 level yesterday, which supports the continuation of the bearish trend scenario effectively during the upcoming sessions, and the road is open to achieve our main waited target at 103.65.

The SMA 50 continues to support the suggested descending wave, noting that breaking the target level will extend the downside wave to reach 103.00 as a next negative station, while the expected decline will remain valid unless the price pushes to breach 105.20 and stabilize above it.

The expected trading range for today is between 103.00 support and 105.20 resistance.