As the protests in Hong Kong escalate and China assembled the People’s Armed Policy on the outskirts of Shenzhen, bordering Hong Kong, forex traders continued to flock to safe haven currencies such as the Japanese Yen. Japanese economic data released during the Asian trading session showed further signs of deflationary pressures and a struggling domestic economy. With the Bank of Japan alerting the markets that it won’t allow the Japanese Yen to strengthen much further, is now the time to but the EURJPY? This morning’s fundamental analysis will explore the options to the upside as well as to the downside.
This morning’s European trading session will focus on the key German ZEW Survey where economists anticipate a weaker reading across the board will all sub-components expected in negative territory. Forex traders have already priced in the ECB’s dovish tone and The EURJPY just closed a trading gap from April 24th 2017, will a short-covering rally follow? Which central bank is willing to intervene more, the ECB or the Bank of Japan? Follow the PaxForex Daily Fundamental Analysis and join our fast growing community of profitable forex traders!
Here are the key factors to keep in mind today for Euro trades:
- Final German CPI: The Final German CPI for July is predicted to increase by 0.5% monthly and by 1.7% annualized. Forex traders can compare this to the previous German CPI for July which increased by 0.5% monthly and by 1.7% annualized. The Final EU Harmonized German CPI for July is predicted to increase by 0.4% monthly and by 1.1% annualized. Forex traders can compare this to the previous EU Harmonized German CPI for July which increased by 0.4% monthly and by 1.1% annualized.
- German Wholesale Price Index: The German Wholesale Price Index for July is predicted to increase by 0.2% monthly and by 0.9% annualized. Forex traders can compare this to the German Wholesale Price Index for June which decreased by 0.5% monthly and which increased by 0.3% annualized.
- Final Spanish CPI: The Final Spanish CPI for July is predicted to decrease by 0.6% monthly and to increase by 0.5% annualized. Forex traders can compare this to the previous Spanish CPI for July which decreased by 0.6% monthly and which increased by 0.5% annualized. The Final EU Harmonized Spanish CPI for July is predicted to decrease by 1.1% monthly and to increase by 0.7% annualized. Forex traders can compare this to the previous EU Harmonized Spanish CPI for July which decreased by 1.1% monthly and which increased by 0.7% annualized.
- German ZEW Survey and Eurozone ZEW Survey: The German ZEW Survey Current Situation Index for August is predicted at -7.0 and the German ZEW Survey Economic Expectations Index at -27.8. Forex traders can compare this to the German ZEW Survey Current Situation Index for July which was reported at -1.1 and to the German ZEW Survey Economic Expectations Index which was reported at -24.5. The Eurozone ZEW Survey Economic Sentiment Index for August is predicted at -21.7. Forex traders can compare this to the Eurozone ZEW Survey Economic Sentiment Index for July which was reported at -20.3.
Here are the key factors to keep in mind today for Japanese Yen trades:
- Japanese Domestic Corporate Goods Price Index: The Japanese Domestic Corporate Goods Price Index for July was reported flat at 0.0% monthly and decreased by 0.6% annualized. Economists predicted an increase of 0.1% monthly and a decrease of 0.5% annualized. Forex traders can compare this to the Japanese Domestic Corporate Goods Price Index for June which decreased by 0.5% monthly by 0.1% annualized.
- Japanese Tertiary Industry Index: The Japanese Tertiary Industry Index for June decreased by 0.1% monthly. Economists predicted a decrease of 0.1% monthly. Forex traders can compare this to the Japanese Tertiary Industry Index for May which was reported flat at 0.0% monthly.
Should price action for the EURJPY remain inside the or breakout above the 117.500 to 118.700 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 118.000
- Take Profit Zone: 121.350 – 122.200
- Stop Loss Level: 117.300
Should price action for the EURJPY breakdown below 117.500 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 117.150
- Take Profit Zone: 114.850 – 115.750
- Stop Loss Level: 118.000
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