Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Japanese Corporate Service Price Index for May increased by 1.8% annualized. Forex traders can compare this to the Japanese Corporate Service Price Index for April, which rose 1.7% annualized.
The Japanese National CPI for May increased 0.2% monthly and 2.5% annualized. Forex traders can compare this to the Japanese National CPI for April, which rose 0.4% monthly and 2.5% annualized. The Japanese National Core CPI for May increased 0.8% monthly and 2.1% annualized. Forex traders can compare this to the Japanese National Core CPI for April, which rose 0.8% monthly and 2.1% annualized.
The Final Spanish GDP for the first quarter is predicted to increase 0.3% quarterly and 6.4% annualized. Forex traders can compare this to the Spanish GDP for the fourth quarter, which rose 2.2% quarterly and 5.5% annualized.
Italian Business Confidence for June is predicted at 108.5, and Italian Consumer Confidence is predicted at 102.5. Forex traders can compare this to Italian Business Confidence for May, reported at 109.3, and Italian Consumer Confidence, reported at 102.7.
The German IFO Business Climate Index for June is predicted at 92.9, the German IFO Current Assessment Index at 99.1, and the German IFO Expectations Index at 87.4. Forex traders can compare this to the German IFO Business Climate Index for May, reported at 93.0, the German IFO Current Assessment Index at 99.1, and the German IFO Expectations Index at 86.9.
Financial markets rose yesterday despite dismal PMI reading out of the Eurozone and the US, which showed economies are slowing faster than forecast for June. The data may not suffice for a technical recession in the second quarter, but traders should expect a first-half GDP contraction and realize that a recession has begun. Central banks will hike rates aggressively to catch up with the inflation they created. The Bank of Japan may have to act as the Japanese Yen spirals out of control, while the Euro could benefit from carry trade opportunities.
The forecast for the EUR/JPY remains bearish after the horizontal resistance area rejected this currency pair and a double top formed. Adding to fading bullishness is the flat Tenkan-sen, and the Ichimoku Kinko Hyo Cloud shows signs of upward exhaustion after the Senkou Span B flatlined. Volatility is likely to remain high with the ascending Kijun-sen meeting the bullish-bearish standoff for control over the next move. The CCI completed a breakdown from extreme overbought territory, and traders should monitor this technical indicator for a move below zero before adding new sell positions. Can bears regain the upper hand and force 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 141.000 to 142.800 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 142.000
- Take Profit Zone: 136.000 – 137.850
- Stop Loss Level: 144.250
Should price action for the EURJPY breakout above 142.800, PaxForex recommends the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 144.250
- Take Profit Zone: 145.700 – 147.150
- Stop Loss Level: 142.800
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