The US dollar fluctuated in a narrow range slanting to an upside during the Asian session against the Japanese yen, after the economic developments and data adopted by the Japanese economy and on the cusp of economic developments and data expected today, Tuesday, by the US economy, the largest economy in the world, which includes the testimony of Federal Reserve Governor Jerome Powell to Congress. About the loan program to cope with emergency epidemics.
At exactly 06:59 am GMT, the US dollar against the Japanese yen rose by 0.07% to 104.38 levels compared to opening levels at 104.31, after the pair achieved its highest level during the session’s trading at 104.46, while it reached its lowest level at 104.25.
We followed up on the Japanese economy, the release of the unemployment rate index reading, which showed a rise to 3.1%, in line with expectations, compared to 3.0% last September, before we witnessed the capital spending index reading showed a decline in decline to 10.6% compared to 11.3% in the last second quarter, Surpassing expectations, which indicated a widening decline to 12.0%.
Up to the disclosure of the final reading of the manufacturing PMI by Markit on Japan, which showed the contraction of the deflation to a value of 49.0 compared to the initial reading of last month and expectations of 48.3 and compared to 48.7 last October, otherwise, we followed yesterday the statement of the Japanese Finance Minister Taro Aso said that his country's economy is in a very difficult situation due to the Corona pandemic.
On the other hand, the markets are looking to reveal the final reading of the manufacturing PMI by Markit from the United States, which may reflect the stability of the expansion at a value of 56.7, unchanged from the preliminary reading for the past month and compared to 53.4 in October, before we witness from Before the US economy, the construction spending index was released, which shows growth accelerating to 8.0%, compared to 0.3% in September.
This comes in conjunction with the disclosure by the largest industrial country in the world of a reading of the Industrial Supply Institute index, which may show a decrease in the expansion to a value of 57.9 compared to 59.3 in the previous reading for the month of October, as the reading of the same index measured by prices may indicate that the expansion has decreased to what Its value is 65.0 against 65.5 in October.
This also coincides with the start of the testimony of Federal Reserve Governor Jerome Powell before Congress in both houses of the House and Senate in Washington today and tomorrow Wednesday regarding the "CARES" law, and this comes hours after the Federal Reserve announced that the liquidity facility will be extended for commercial papers, money markets and major traders. And the payroll check protection program until the end of March 2021.
We would like to point out that the Federal Reserve made it clear in its statement yesterday that these programs are separate from the credit facilities that the US Treasury Department recently ordered to close by the end of this month, and it is reported that Treasury Secretary Stephen Mnuchin sent a message last month to Federal Reserve Governor Powell stating that the amount of $ 455 billion The CARES appropriation must be available to Congress for reallocation.
Technical analysis
The dollar against the yen bounced back significantly yesterday, reaching the pivotal resistance 104.50, accompanied by the stochastic index reaching overbought areas, which supports the strength of the current resistance areas and provides opportunities for a bearish rebound to resume the negative main scenario.
So far, the bearish trend scenario remains valid unless breaching 104.50 and holding above it, as breaching it will push the price to test 105.20 as a next positive target, while the expected downside wave targets start at 103.65 and extend to 103.00.
The expected trading range for today is between 103.65 support and 105.00 resistance
The expected general trend for today: Bearish