Forex traders will finish this week, filled with economic data pointing towards a slowing Eurozone economy, with more disappointment expected out of Germany. Industrial production is anticipated to post another annualized contraction and pressure the Euro. The French trade balance and Italian retail sales will be released later in the session. How will this data impact price action in the EURJPY, currently hovering at resistance? Today’s fundamental analysis will take a look at price action in both directions.
Japanese labor cash earnings rose more than economists expected, but household spending plunged. This wiped out the previous month’s strong increase and confirms the fragile state of the Japanese economy. The EURJPY remained at resistance, but how will this currency pair react to economic data released later in the session? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Here are the key factors to keep in mind today for Euro trades:
- German Industrial Production: German Industrial Production for October is predicted to increase by 0.1% monthly and to decrease by 3.6% annualized. Forex traders can compare this to German Industrial Production for September which decreased by 0.6% monthly and by 4.3% annualized.
- French Trade Balance: The French Trade Balance for October is predicted at -€4.80B. Forex traders can compare this to the French Trade Balance for September which was reported at -€5.60B.
- Italian Retail Sales: Italian Retail Sales for October are predicted to increase by 0.5% monthly and by 1.0% annualized. Forex traders can compare this to Italian Retail Sales for September which increased by 0.7% monthly and by 0.9% annualized.
Here are the key factors to keep in mind today for Japanese Yen trades:
- Japanese Labor Cash Earnings and Japanese Real Cash Earnings: Japanese Labor Cash Earnings for October increased by 0.5% annualized and Japanese Real Cash Earnings increased by 0.1% annualized. Economists predicted an increase of 0.2% and a decrease of 0.3%. Forex traders can compare this to Japanese Labor Cash Earnings for September which increased by 0.5% annualized and to Japanese Real Cash Earnings which increased by 0.2% annualized.
- Japanese Household Spending: Japanese Household Spending for October decreased by 11.5% monthly and by 5.1% annualized. Economists predicted a decrease of 9.8% and 3.0% annualized. Forex traders can compare this to Japanese Household Spending for September which increased by 5.5% monthly and by 9.5% annualized.
Should price action for the EURJPY remain inside the or breakdown below the 120.400 to 121.000 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 120.750
- Take Profit Zone: 117.100 – 117.550
- Stop Loss Level: 121.450
Should price action for the EURJPY breakout above 121.000 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 121.450
- Take Profit Zone: 122.300 – 122.900
- Stop Loss Level: 121.000
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