The Eurozone’s two biggest economies, Germany an France, reported trade data for September this morning. Germany surprised to the upside with a rise in exports while France surprised to the downside with a bigger than expected deficit. Optimism on the global trade front increased after China announced that tariffs may be scaled back step-by-step, in a mutual fashion. The EURJPY remained at resistance, where will price action be headed next? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Japanese economic data showed a surge in labor cash earnings which also translated into a boost in overall household spending. This was a rare dose of positive economic news for the Japanese economy, which is used to depressed reading with the occasional surprise. The EURJPY remained at resistance levels as a surprise in German export data prevented a sell-off. How will price action react moving forward? Today’s fundamental analysis will take a look at the upside potential as well as downside risk in this currency pair.
Here are the key factors to keep in mind today for Euro trades:
- German Trade Balance & German Current Account Balance: The German Trade Balance for September was reported at a €19.2B. Economists predicted a figure of €18.1B. Forex traders can compare this to German Trade Balance for August which was reported at €18.7B. Exports for September increased by 1.5% monthly and Imports increased by 1.3% monthly. Economists predicted an increase of 0.4% monthly and a flat reading of 0.0% monthly. Forex traders can compare this to Exports for August which decreased by 0.9% monthly and to Imports which increased by 0.1% monthly. The German Current Account Balance for September was reported at a €25.5B. Economists predicted a figure of €19.1B. Forex traders can compare this to the German Current Account Balance for August which was reported at €16.9B.
- French Trade Balance and French Current Account Balance: The French Trade Balance for September was reported at -€5.60B. Economists predicted a figure of -€4.80B. Forex traders can compare this to the French Trade Balance for August which was reported at -€5.40B. The French Current Account Balance for September was reported at -€2.70B. Forex traders can compare this to the French Current Account Balance for August which was reported at -€3.00B.
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 September increased by 0.8% annualized and Japanese Real Cash Earnings increased by 0.6% annualized. Economists predicted an increase of 0.1% and a decrease of 0.4%. Forex traders can compare this to Japanese Labor Cash Earnings for August which decreased by 0.1% annualized and to Japanese Real Cash Earnings which decreased by 0.5% annualized.
- Japanese Household Spending: Japanese Household Spending for September increased by 5.5% monthly and by 9.5% annualized. Economists predicted an increase 3.8% and of 7.8% annualized. Forex traders can compare this to Japanese Household Spending for August which increased by 2.4% monthly and by 1.0% annualized.
- Japanese Buying Foreign Bonds and Japanese Buying Foreign Stocks/Foreign Buying Japanese Bonds and Foreigners Buying Japanese Stocks: Japanese Buying Foreign Bonds for the period ending November 1st was reported at ¥668.1B and Japanese Buying Foreign Stocks was reported at ¥388.7B. Forex traders can compare this to Japanese Buying Foreign Bonds for the period ending October 25th which was reported at -¥1,055.7B and to Japanese Buying Foreign Stocks which was reported at ¥1.4B. Foreign Buying Japanese Bonds for the period ending November 1st was reported at -¥539.8B and Foreigners Buying Japanese Stocks was reported at ¥420.9B. Forex traders can compare this to Foreign Buying Japanese Bonds for the period ending October 25th which was reported at ¥26.0B and to Foreigners Buying Japanese Stocks which was reported at ¥649.3B.
- Japanese Leading Index and Japanese Coincident Index: The Preliminary Japanese Leading Index for September was reported at 92.2 and the Preliminary Japanese Coincident Index was reported at 101.1. Economists predicted a figure of 92.2 and of 101.0. Forex traders can compare this to the Japanese Leading Index for August which was reported at 91.9 and to the Japanese Coincident Index which was reported at 99.0.
Should price action for the EURJPY remain inside the or breakdown below the 120.450 to 121.100 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 120.750
- Take Profit Zone: 117.100 – 111.550
- Stop Loss Level: 121.450
Should price action for the EURJPY breakout above 121.100 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 121.450
- Take Profit Zone: 123.100 – 123.700
- Stop Loss Level: 120.750
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