JPY Analysis 17.09.2019

The US dollar fluctuated in a narrow uptrend range during the Asian session to see the 12th session rebound from its lowest since November 9, 2016, showing the highest since early August, when it tested the highest since late May Against the Japanese yen amid the lack of economic data on the Japanese economy and on the eve of developments and economic data expected on Tuesday by the US economy.

At 06:27 am GMT, the US dollar against the Japanese yen rose 0.06% to 108.19 levels compared to the opening levels at 108.12, after the pair reached its highest level in seven weeks at 108.37, while the lowest level during the session trading at 108.02.

Investors are awaiting the US economy, the world's largest industrialized countries, for the Industrial Production Index, which may show a 0.2% growth versus a decline of 0.2% in July, while the reading of the energy utilization rate may show growth accelerated to 77.6% vs. 77.5%, before We are witnessing the release of the housing market data with the release of the housing index released by the National Association of Home Builders which may reflect a stability at 66 during September.

Markets are also looking to kick off the FOMC meeting later today and Wednesday in Washington, which is expected to cut interest rates on federal funds by 25 basis points for the second consecutive meeting to between 1.75% and 2.00%. To reveal the expectations of the members of the Committee on growth rates, inflation and unemployment in addition to the future of interest rates for the next three years.

Federal Reserve Governor Jerome Powell will hold a press conference tomorrow, half an hour after the FOMC meeting, which has been widely criticized by US President Donald Trump. Powell cut interest rates "to zero or less."

Markets are also looking ahead to Thursday's meeting of the Bank of Japan in Tokyo on expectations that if the Fed cut interest rates, one week after the European Central Bank cut its deposit rate by 10 basis points to minus -0.50% with the announcement of a re-program. Buying 20 billion euros of assets by early November could put pressure on the BoJ to expand stimulus.

In view of the development of trade talks, we followed yesterday, President Trump said that his country has reached preliminary trade agreements with Japan, and markets are looking forward to the launch of a new round of trade talks between America and China at the level of deputy officials in Washington next Thursday in preparation for the upcoming high-level talks Early next month, which aims to resolve trade disputes between the two largest economies in the world.

Technical Analysis

USDJPY resumed significantly positive trading yesterday to begin attempts to breach the 108.30 level, reinforcing expectations for the continuation of the bullish trend over the coming sessions, awaiting confirmation of the breach to open the way towards 109.30 as the next target.

Therefore, we will hold onto our bullish outlook that will prevail within the ascending channel shown above unless the 107.70 level is breached and stability below it.

Expected trading range for today is between 107.70 support and 109.00 resistance.

Expected trend for today: Bullish.