JPYUSD analysis 07.08.2020

The US dollar fluctuated in a narrow range slanting to an upside during the Asian session, while it is still in the process of its third consecutive weekly losses against the Japanese yen after the economic developments and data that we followed on the Japanese economy and before the developments and economic data expected on Friday by the US economy, the largest economy in the world.

At exactly 05:55 am GMT, the US dollar against the Japanese yen rose by 0.01% to 105.56 levels, compared to opening levels at 105.55, after the pair achieved its highest level during the session's trading at 105.64, while it reached its lowest level at 105.49.

The Japanese economy, the second largest in Asia and the third largest in the world, has followed the release of the annual household spending reading, which showed a decline in the decline to 1.2% compared to 16.2% in May, surpassing expectations that indicated a contraction of the decline to 7.8%. This came in conjunction with the annual average income reading showed that the decline has narrowed to 1.7% compared to 2.3% in May, also in line with expectations that indicated a decrease in the decline to 3.0%.

This came before we witnessed the release of the preliminary reading of the leading indicators, which showed an acceleration of growth to a value of 85.0 compared to 78.4 in May, surpassing expectations of 84.8. Otherwise, we followed yesterday's confirmation by Japanese Prime Minister Shinzo Abe that the current situation in his country In light of the outbreak of the Coronavirus and the return of the high number of coronavirus infections, it is more difficult than it was in April, but the current situation does not warrant the declaration of a state of emergency.

On the other hand, investors are currently awaiting the US economy to unveil labor market data, with the release of the employment change index reading for the non-agricultural sectors, which may reflect 1,530,000 jobs added compared to 4,800,000 jobs added in June, while the average income index reading may indicate Per hour, the decline narrowed to 0.5% from 1.2%. This is with the unemployment rate reading showing a decline to 11.1% compared to 12.3% in June.

This comes before we witness the release of the final reading of the wholesale inventories index, which may confirm a decline of 2.0%, unchanged from the previous initial reading for the month of June and against a decline of 1.2% in May, and the consumer credit reading showed an increase to about $ 10.0 billion against It fell to $ 18.3 billion in May, in conjunction with US lawmakers' discussions about the anticipated virus relief package by Congress.

Technical analysis

The dollar versus yen has shown sideways and narrow range trading since yesterday, and is still below the EMA 50, waiting for the negative trading to resume to breach 105.20 and confirm the extension of the downside wave towards 103.65.

In general, we will continue to suggest the bearish trend unless the 106.44 level is breached and stability above it, noting that the stochastic indicator continues to lose positive momentum to support expectations for the continuation of the negative overall scenario.

The expected trading range for today is between 104.70 support and 106.00 resistance.

The expected general trend for today: Bearish.