Forex traders are looking forward to the first press conference by new ECB President Lagarde following the interest rate announcement. Expectations call for no change as the shadow of Draghi’s divided ECB is anticipated to linger. The EURJPY is waiting for the press conference inside its horizontal resistance area, how will this currency pair be impacted in the aftermath of Lagarde’s first post-ECB press conference? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Japanese machine orders posted a bigger-than-expected contraction and add to the growing amount of economic data pointing towards a much weaker global economy. The data pushed the EURJPY higher, but today’s ECB press conference is eagerly anticipated. Will bulls get enough to force a breakout in price action, or can bears step in and pressure for a reversal? Today’s fundamental analysis will take a look at price action in both directions.
Here are the key factors to keep in mind today for Euro trades:
- Final German CPI: The Final German CPI for November is predicted to decrease by 0.8% monthly, and to increase by 1.1% annualized. Forex traders can compare this to the previous German CPI for November, which decreased by 0.8% monthly, and which increased by 1.7% annualized. The Final EU Harmonized German CPI for November is predicted to decrease by 0.8% monthly, and to increase by 1.2% annualized. Forex traders can compare this to the previous EU Harmonized German CPI for November, which decreased by 0.8% monthly, and which increased by 1.2% annualized.
- Final French CPI: The Final French CPI for November is predicted to increase by 0.1% monthly, and by 1.0% annualized. Forex traders can compare this to the previous French CPI for November, which increased by 0.1% monthly and by 1.0% annualized. The Final EU Harmonized French CPI for November is predicted to increase by 0.1% monthly, and by 1.2% annualized. Forex traders can compare this to the previous EU Harmonized French CPI for November, which increased by 0.1% monthly and by 1.2% annualized.
- Eurozone Industrial Production: Eurozone Industrial Production for October is predicted to decrease by 0.5% monthly, and by 2.4% annualized. Forex traders can compare this to Eurozone Industrial Production for September, which increased by 0.1% monthly, and which decreased by 1.7% annualized.
- ECB Rate Decision: The ECB is predicted to keep its Interest Rate at 0.00%, its Deposit Facility Rate at -0.50%, and its Marginal Lending Facility Rate at 0.25%; this would equal no change in the ECB rate policy from the previous meeting.
Here are the key factors to keep in mind today for Japanese Yen trades:
- Japanese Machine Orders: Japanese Machine Orders for October decreased by 6.0% monthly and increased by 6.1% annualized. Economists predicted an increase of 0.7% monthly and a decrease of 1.9% annualized. Forex traders can compare this to Japanese Machine Orders for September, which decreased by 2.9% monthly and which increased by 5.1% annualized.
- Japanese Buying Foreign Bonds and Japanese Buying Foreign Stocks/Foreign Buying Japanese Bonds and Foreigners Buying Japanese Stocks: Japanese Buying Foreign Bonds for the period ending December 6th was reported at ¥235.8B and Japanese Buying Foreign Stocks was reported at ¥236.4B. Forex traders can compare this to Japanese Buying Foreign Bonds for the period ending November 29th ,which was reported at -¥511.1B and to Japanese Buying Foreign Stocks, which was reported at ¥210.0B. Foreign Buying Japanese Bonds for the period ending December 6th was reported at ¥475.6B and Foreigners Buying Japanese Stocks was reported at -¥200.4B. Forex traders can compare this to Foreign Buying Japanese Bonds for the period ending November 29th,which was reported at ¥606.2B and to Foreigners Buying Japanese Stocks, which was reported at ¥394.0B.
Should price action for the EURJPY remain inside the or breakdown below the 120.750 to 121.450 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 121.000
- Take Profit Zone: 118.600 – 119.250
- Stop Loss Level: 121.700
Should price action for the EURJPY breakout above 121.450 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 121.700
- Take Profit Zone: 122.200 – 122.550
- Stop Loss Level: 120.450
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