Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Preliminary Japanese Jibun Bank Manufacturing PMI for September came in at 51.0, the Preliminary Japanese Jibun Bank Services PMI at 51.9, and the Preliminary Japanese Jibun Bank Composite PMI at 50.9. Forex traders can compare this to the Japanese Jibun Bank Manufacturing PMI for August, reported at 51.5, the Japanese Jibun Bank Services PMI at 49.5, and the Japanese Jibun Bank Composite PMI at 49.4.
The German IFO Business Climate Index for September is predicted at 87.0, the German IFO Current Assessment Index at 96.0, and the German IFO Expectations Index at 79.0. Forex traders can compare this to the German IFO Business Climate Index for August, reported at 88.5, the German IFO Current Assessment Index at 97.5, and the German IFO Expectations Index at 80.3.
Exit polls for the Italian general election indicate that Giorgia Meloni will become the next Italian Prime Minister. Her Fratelli d'Italia (Brothers of Italy) could lead a coalition government, including The Northern League led by Matteo Salvini and Forza Italia led by former Prime Minister Silvio Berlusconi. A relatively light economic calendar could extend the Forex trends from last week, but the Euro may stabilize following its sharp sell-off.
While the Bank of Japan maintains negative interest rates as it hopes it can spark inflation across Japan following two decades of mostly deflationary pressures, it began interfering in the Forex market last week. It followed its announcement of no change in its ultra-loose monetary policy in an attempt to prevent a further collapse in the Japanese Yen. Traders should proceed with caution as the Bank of Japan is likely to interfere on several occasions, most likely by selling US Treasuries to finance its Forex interventions.
The forecast for the EUR/JPY turned cautiously bullish after this currency pair corrected into its Ichimoku Kinko Hyo Cloud, which shows signs of a sideways trend following its bullish stance, as the Senkou Span A and the Senkou Span B flatlined. Volatility could spike with the Kijun-sen flat and the Tenkan-sen descending, and a bearish crossover could follow before selling pressure fades. Trades should monitor the CCI after it plunged into extreme oversold territory and recorded a multi-week low. It began to drift higher, and a breakout above -100 could trigger a buying catalyst and short-covering rally. Can bulls withstand further bearishness and push the EUR/JPY into its horizontal resistance 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 breakout above the 137.800 to 139.700 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 138.600
- Take Profit Zone: 144.000 – 145.600
- Stop Loss Level: 136.750
Should price action for the EURJPY breakdown below 137.800, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 136.750
- Take Profit Zone: 133.400 – 134.900
- Stop Loss Level: 137.800
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio.
