The US dollar fluctuated in a narrow range slanting to an upside during the Asian session, to witness its rebound for the second session from its lowest since the ninth of November against the Japanese yen amidst the encouragement of economic data on 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 start of the meeting of the Federal Open Market Committee.
At 07:17 AM GMT, the US dollar against the Japanese yen rose by 0.05% to 104.10 levels compared to the opening levels at 104.05, after the pair achieved its highest level during the session’s trading at 104.15, while it reached its lowest level at 103.99.
We have followed up on the Bank of Japan's extension of the corporate finance program for six months as part of the efforts aimed at confronting the negative repercussions of the Corona pandemic, and this came hours after the report touched upon the fact that the Japanese government intends to approve a third additional stimulus package during the fiscal year that expires at the end of next March. 19.2 trillion yen ($ 185 billion) to support the second largest economy in Asia and the third largest in the world against the repercussions of the pandemic.
On the other hand, investors are awaiting the US economy to reveal the industrial sector data for the largest industrialized country in the world with the release of the New York Industrial Index, which may reflect the stability of the expansion at a value of 6.3 during December, in conjunction with the release of the import price index reading, which It might show a 0.3% rise versus a 0.1% decline last October.
This comes, before we witness the release of the industrial production index, which may reflect a slowdown in growth to 0.3% compared to 1.1% in October, in conjunction with the reading of the energy utilization rate index showing an increase to 73.1% against 72.8%, leading to the start of the FOMC meeting. For the open market December 15-16, during which interest rates are expected to remain at the lowest ever, between zero and 0.25%.
Markets are also looking forward to tomorrow, Wednesday, after the FOMC meeting, to reveal the committee’s expectations for growth rates, inflation and unemployment, in addition to the future interest rates for the next three years and amid market’s hopes for the Fed’s expansion in the asset purchase program, half an hour before the press conference to be held by the Reserve Bank governor. Fed Jerome Powell tomorrow to comment on the decisions of the Fed’s monetary policy makers.
Technical analysis
The dollar versus yen pair touched the sideways range support at 103.65 and rebounded significantly from there, heading towards a possible test of this range's resistance at 104.76 during the upcoming sessions, to keep the sideway range dominating the intraday trades until the price managed to surpass one of the mentioned levels.
For the expected targets of the breach, please see our previous report.
The expected trading range for today is between 103.40 support and 104.75 resistance
The expected trend for today: sideways