The US dollar rose during the Asian session, to witness its rebound to the second session from its lowest since the tenth of March, while it is still in the process of its second weekly loss in a row against the Japanese yen, following the developments and economic data they followed on the Japanese economy, which included the decisions and directions of monetary policy makers at The Bank of Japan, on the cusp of economic developments and data expected today, Friday, by the US economy, the largest economy in the world, and amid looking for the approval of US lawmakers to stimulate new financial.
At 06:56 am GMT, the US dollar against the Japanese yen rose by 0.33% to 103.45 levels compared to the opening levels at 103.11, after the pair achieved its highest level during the session's trading at 103.49, while the lowest level was at 103.10.
We have followed up on the Japanese economy revealing the inflation data with the release of the annual reading of the national consumer price index, which showed the expansion of the deflation to 0.9% compared to 0.4% last October, and the annual reading of the same index excluding fresh food showed the expansion of the deflation to 0.9%. In line with expectations, compared to 0.7% in October.
In the same context, the annual reading of the consumer price index excluding energy and fresh food showed a widening contraction of 0.3% compared to 0.2% in October, and this came before we witnessed the decision of monetary policy makers at the Bank of Japan at the December 17-18 meeting. By keeping interest rates negative at 0.10%, which was in line with expectations.
We also followed up on the Bank of Japan's disclosure of the monetary policy statement, which included maintaining the commitment to directing the yield of 10-year government bonds at zero, and monetary policy makers reiterated that additional steps will be taken to monetary easing without hesitation if necessary, and attention is now turning to Actions of the press conference held by Bank of Japan Governor Haruhiko Kuroda to comment on the decisions and directions of the Bank of Japan.
On the other hand, investors are currently awaiting the US economy’s current account reading, which may reflect the widening of the deficit to $ 190 billion compared to $ 171 billion in the last second quarter, before we witness the release of the leading indicators reading, which may reflect slowing growth to 0.4 % Compared to 12.1% in October, leading to the Fed disclosure of the results of US banks' solvency tests.
We would like to point out that the second round of stress tests includes the results of more than 34 banks in the United States, including the banks that succeeded and failed to pass the tests in the first round, and this comes hours after the expiration of the activities of the Federal Open Market Committee meeting December 15-16 / Last Wednesday, during which interest rates were kept at the lowest ever, between zero and 0.25%.
It is noteworthy that the monetary policy makers at the Federal Reserve pledged last Wednesday to keep the interest on federal funds zero and to move forward with the bond-buying program, which is estimated at $ 120 billion per month at least, until employment goals are achieved and price stability is achieved, with the disclosure of the expectations of the members of the Federal Committee Growth rates, inflation and unemployment in addition to the future of interest rates for the next three years.
We would like to point out that Federal Reserve Governor Jerome Powell noted on Wednesday during the press conference he held after the end of the Fed’s meeting, that the case for financial stimulus is “very, very strong,” and came amid the market’s aspiration for US lawmakers to approve a new stimulus package to counter the negative repercussions of the severity of the outbreak. The second wave of Corona virus in recent times.
Technical analysis
The dollar versus yen pair is showing positive trading after it managed to touch our awaited target at 103.00, approaching a re-test of the previously breached 103.65 level, and as long as the price is below this level, our expectations for the downside will remain valid for the upcoming period, whose next target is at 102.50.
We point out that continuing to rise and breaching 103.65 will lead the price to achieve more gains and head towards testing 104.65 areas before any new attempt to decline.
The expected trading range for today is between 102.70 support and 103.80 resistance
The expected general trend for today: Bearish