Source: PaxForex Premium Analytics Portal, Fundamental Insight
Japanese Preliminary Machine Tool Orders for December increased by 8.7% annualized. Forex traders can compare this to Japanese Machine Tool Orders for November, which increased by 8.6% annualized.
Italian Industrial Production for November is predicted to decrease by 0.4% monthly and by 4.3% annualized. Forex traders can compare this to Italian Industrial Production for October, which increased by 1.3% monthly and decreased by 2.1% annualized. Eurozone Industrial Production for November is predicted to increase by 0.2% monthly, and to decrease by 3.3% annualized. Forex traders can compare this to Eurozone Industrial Production for October, which increased by 2.1% monthly and decreased by 3.8% annualized.
The forecast for the EUR/JPY remains bearish after price action stalled. Japan identified a new Covid-19 mutation after the UK and South Africa reported one. Economic data suggests more downside pressure as the pandemic forces restrictions to prevent the collapse of the healthcare system. It favors a stronger Japanese Yen with more EU debt, limiting the upside potential for the Euro. After the Kijun-sen and Tenkan-sen entered a sideways trend, this currency pair can correct into its Ichimoku Kinko Hyo Cloud. The CCI has more room to accelerate lower. Will bears take the lead and force the EUR/JPY into its next 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 126.250 to 126.750 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 126.650
- Take Profit Zone: 123.900 – 124.450
- Stop Loss Level: 127.250
Should price action for the EURJPY breakout above 126.750 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 127.250
- Take Profit Zone: 128.350 – 128.700
- Stop Loss Level: 126.750
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