Source: PaxForex Premium Analytics Portal, Fundamental Insight
Foreign Buying of Japanese Bonds for the period ending August 13th came in at ¥1,152.4B, and Foreigners Buying of Japanese Stocks at ¥45.5B. Forex traders can compare this to Foreign Buying of Japanese Bonds for the period ending August 6th, reported at ¥829.9B, and to Foreigners Buying of Japanese Stocks at ¥61.0B.
The Eurozone CPI for July is predicted to increase by 0.1% monthly and 8.9% annualized. Forex traders can compare this to the Eurozone CPI for June, which rose 0.8% monthly and 8.6% annualized. The Eurozone Core CPI for July is predicted to decrease 0.2% monthly and to rise 4.0% annualized. Forex traders can compare this to the Eurozone Core CPI for June, which increased 0.2% monthly and 3.7% annualized. The Eurozone Harmonized Core CPI for July is predicted to rise 0.4% monthly and 5.0% annualized. Forex traders can compare this to the Eurozone Harmonized Core CPI for June, which expanded 0.4% monthly and 4.6% annualized.
Traders will get key Eurozone inflation data for July this morning, where expectations call for a contraction in the monthly core CPI. The ECB began raising interest rates but maintains an accommodative stance, while the weak Euro creates additional inflationary pressures, similar to the collapse in the Japanese Yen throughout 2022. A weaker CPI reading could keep the ECB at bay with smaller interest rate increases. The global economy remains fragile and continues to slow, as evident by the disappointing Australian labor report, putting US initial jobless claims in focus later today, which have shown a steady rise. The Philadelphia Fed Manufacturing Index for August could confirm a weaker than feared third quarter is shaping up, adding support for a strengthening Japanese Yen, which fights to maintain its safe-haven status. Forex traders wait for the Bank of Japan to pull the trigger and intervene to strengthen the Japanese currency.
The forecast for the EUR/JPY turned bearish as this currency pair continues to approach its widening Ichimoku Kinko Hyo Cloud. It shows a bearish stance after the descending Senkou Span A moved below the flat Senkou Span B. Bulls and bears are set for a battle, leading to a volatility rise amid the lack of momentum as shown by the flat Kijun-sen and Tenkan-sen. Traders should monitor the CCI after it has completed a breakout from extreme oversold territory and crossed above the zero line. A temporary spike into extreme overbought conditions is possible, and traders should wait for a breakdown below 100 before entering their short positions. Can bears overpower bulls and pressure the EUR/JPY into its horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the EURJPY remain inside the or breakdown below the 136.650 to 138.350 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 137.350
- Take Profit Zone: 130.950 – 132.200
- Stop Loss Level: 139.400
Should price action for the EURJPY breakout above 138.350, PaxForex recommends the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 139.400
- Take Profit Zone: 141.250 – 142.300
- Stop Loss Level: 138.350
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio.
