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July 2019

JPY analysis 12.07.2019

The US dollar fluctuated in a narrow range slipping into the US session to see its rebound for the second session in three sessions of its highest since May 31 against the Japanese yen following developments and economic data that followed the Japanese economy, the third largest economy in the world and on the eve of developments and data Economic outlook on Friday by the US economy, the world's largest economy.

At 05:59 GMT, the pair dropped 0.16% to 108.33 from the opening level at 108.50, after reaching a session low of 108.29 and a high of 108.61.

We followed the Japanese economy, the world's third-largest industrial country, to release industrial data with the final reading of industrial production, which showed growth slowed to 2.0% from May's preliminary reading and expectations of 2.3% versus 0.6% in April, While the annual reading of the same index showed a widening of the decline to 2.1% compared to 1.8%, and the reading of the rate of energy utilization accelerated growth to 1.7% compared to 1.6%.

On the other hand, investors are currently waiting for the US economy to disclose the reading of the PPI, which is a preliminary index of inflationary pressures, which may reflect the stability of growth at 0.1%, unchanged from what it was in the previous reading for the month of May, and may appear The core reading of the index itself was 0.2% growth, unchanged from May.

In the same context, the PPI may slow growth to 1.6% from 1.8% in the previous annual reading for May, and the core annualized reading for the same index may show a slowdown in growth to 2.1% from 2.3% in May. Hours after inflation data was released last month, with the consumer price index reading released on Thursday surpassing expectations.

Otherwise, we also followed yesterday the second and last half of Federal Reserve Governor Jerome Powell's semi-annual testimony before the Senate Banking Committee, hours after he gave his first half of his testimony to the House Financial Services Committee last Wednesday, completing his half- Annual policy on monetary policy before the US Congress.

We note that Powell's testimony has reinforced market speculation that Fed monetary policy makers will cut federal funds at the Federal Open Market Committee meeting scheduled for July 30-31, Minutes of the Fed's latest meeting, which in turn supported cuts in interest rates by 25 basis points by the end of the month.

Technical Analysis

The USD/JPY pair made a positive move yesterday to move above 108.10 to signal the price attempt to return to the upside correction, but we see that Stochastic is showing negative signs now, which could push the pair lower again.

Therefore, the contradiction between the technical factors makes us prefer to stop on the neutral temporarily until we get a clearer indication of the next direction, which we will get through the breach of the resistance 108.93 or break the support 108.10, noting that the breach of this resistance will push the price for further upward correction Which has the next target at 109.60, while breaking the support will press the price to resume the main downside trend targeting 106.78 mainly.

The trading range for today is among the key support at 107.60 and resistance at 109.10.

The expected general trend for today: neutral.

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