The US dollar fluctuated in a narrow range that tends to decline during the Asian session in corrections after it rose by more than one percent yesterday, showing the best daily performance since March 28, 2018 against the Japanese yen and comes amid the lack of economic data from the Japanese economy On the eve of economic developments and data expected on Wednesday by the US economy, the largest economy in the world.
At 05:58 AM GMT, USD / JPY fell 0.28% to 106.44 levels from 106.74 opening levels, after hitting a session low of 106.24 and a high of 106.77.
Investors are currently awaiting the US economy to reveal its import price index reading, which may reflect stability at zero levels against a decline of 0.9% in the previous reading for the month of June, while the annual reading of the same indicator may show the stability of the decline at 2.0%, little changed from What they were in June.
We should note that the disappointing Chinese data which followed at the beginning of the session allowed the yen, which investors adopt as a safe haven, to enter yesterday's corrective losses following the announcement of the US Treasury Department to postpone the date of activating the imposition of tariffs on American imports of some Chinese goods. December, renewing hopes of resolving trade disputes between Washington and Beijing.
The USDJPY rallied strongly yesterday to breach the 105.50 level and make an upward correction to the downside wave that started from 109.32 to 105.05, and note that the price found strong resistance at the 38.2% Fibonacci correction level at 106.70, starting to bounce lower from there, coinciding with the loss of the index Stochastic for positive momentum and reaching overbought areas.
Therefore, we believe that chances are available for resuming the main bearish trend, whose next key target is at 104.60, while a break above 106.70 represents the key to extend the corrective wave to reach 107.70 as the next stop.
Expected trading range for today is between 105.50 support and 107.00 resistance.
Expected trend for today: Overall bearish.