JPY analysis 02.08.2019

The US dollar fluctuated in a tight range slipping into the US session to see its rebound for the second consecutive session from its highest since late May, showing its lowest since June 25, when it tested its lowest since January 3 in front of Following the economic developments and data that followed on the Japanese economy and on the eve of economic developments and data expected on Friday by the US economy.

At 05:59 GMT, the USDJPY dropped 0.20% to 107.12 from the opening levels at 107.34, after reaching the lowest level since June 25 at 106.85, while the highest in the trading session Session at 107.57.

We followed the Japanese economy to reveal the annual reading of the Bank of Japan's monetary base index, which showed a slowdown in growth to 3.7% from 4.0% last June, worse than expectations of slowing growth to 3.8%. The Japanese Central Bank has started using this indicator as its main operational target for the monetary base scheme since April 2013.

This came in conjunction with the minutes of the BoJ meeting held on July 30, in which the Bank of Japan's monetary policy makers agreed to keep interest rates at 0.10%, maintain the asset purchase program unchanged and future interest rate trends, Which was expected in the markets, with the disclosure at the time of the statement of monetary policy, which said the Bank of Japan lowered its forecast for inflation and growth.

On the other hand, investors are currently looking for the US economy to reveal labor market data for the last month, which could reflect a drop in unemployment rates to a 49-year low of 3.6% versus 3.7% in June, while the change in jobs for sectors The pace of job creation slowed to 164,000 from 224,000, and the average hourly earnings index may show a 0.2% growth rate.

This comes ahead of the release of the trade balance, which may reflect a contraction of the deficit to $ 54.2 billion from $ 55.5 billion in May, and before the factory orders reading, which may show a 0.6% rise versus a 0.7% drop in May, With the final reading of the University of Michigan Consumer Confidence Index extending to 98.5 from July's preliminary reading of 98.4 versus 98.2 in June.

The Federal Open Market Committee on Wednesday approved a federal funds rate cut of 25 basis points for the first time in more than a decade, which was expected in the markets. Federal Reserve Governor Jerome Powell said during his press conference after the end of the events The meeting of the Federal Committee because the decision came in view of the "global developments" and "weakening inflation".

Technical Analysis

The USD / JPY pair was subjected to strong negative pressure yesterday, pushing the pair to reach the previously recorded low of 106.78, stopping the suggested bullish correction scenario in our recent reports and pressuring the pair to achieve further bearishness in the coming period, noting that breaking the mentioned level will extend the downside wave To reach 105.65.

Therefore, the bearish trend will be likely in the coming sessions unless the 108.10 level is breached and stability above it.

The trading range for today is expected among the support at 106.00 and the resistance at 107.60

The general trend for today is bearish.