The dollar fell during the Asian session to see its rebound for the second session of its highest since March 15 against the Japanese yen following developments and economic data that followed the Japanese economy on the eve of developments and economic data expected on Monday by the US economy.
At 06:04 GMT, the pair dropped by 0.25% to 111.45 in comparison to the opening levels at 111.71 after recording a low of 111.35 and a high of 111.77.
Japan's current account reading showed the surplus widened to 2.67 trillion yen from 0.60 trillion yen in January beating expectations that the surplus would widen to 2.63 trillion yen. The seasonally revised index showed the surplus to 1.96 trillion yen from 1.83 trillion yen in January well above expectations of 1.92 trillion yen.
This came ahead of the consumer confidence reading. It showed a drop to 40.5 from the previous February reading and expectations at 41.5 leading to the disclosure of the Echo Watchers survey of current conditions by the Cabinet Office. It showed a contraction of 44.8 to 47.5 last February contrary to expectations that the deflation shrank to 47.6.
The Japanese government recently announced a 10-day holiday for Japan's celebrations of the new emperor's accession to power during the official holiday from Saturday from April 27 to May 6. We would like to point out this six-day vacation will be the longest in Japan's history.
Investors are waiting for the US economy to read the factory demand index. It may reflect a decline of 0.5% against January's 0.1% rise. This comes hours after the release of data on the US labor market on Friday on the eve of disclosure on the minutes of the meeting of the Federal Open Market Committee held on March 19-20.
Technical analysis:
The USDJPY pair is trading with marked negative resistance to retest the previously breached resistance. It’s supporting now at 111.44, forming the first protective factor for the continuation of the positive outlook suggested in our recent reports, awaiting the resumption of the upside trend targeting 112.14.
Therefore, we will keep our bullish outlook intact unless the pair continues its negative pressure to break below 111.44 and then settle at 110.66 noting that SMA 50 continues to provide positive support for the price.
The trading range for today is expected among the support at 110.66 and the resistance at 112.14.
The general trend for today is bullish.