The German ZEW Survey, which also includes the Eurozone ZEW Survey, will be in focus today and is expected to move the Euro. Economists predict a sharp deterioration for the month of October which would confirm that the economic slowdown is gathering momentum. How will the EURJPY be impacted after the release of this report, especially if the data is even worse than expected? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Final Japanese Industrial production data confirmed the initially reported contraction, but capacity utilization contracted more than expected which suggests more economic pain for the faltering Japanese economy. The key Tertiary Index expanded less than economists anticipated, further highlighting economic weakness. The EURJPY remains inside its horizontal resistance area, will bulls force a breakout or can bears pressure a breakdown? Today’s fundamental analysis will cover price action in both directions.
Here are the key factors to keep in mind today for Euro trades:
- French CPI: The French CPI for September decreased by 0.3% monthly and increased by 0.9% annualized. Economists predicted a decrease of 0.3% monthly and an increase of 0.9% annualized. Forex traders can compare this to the French CPI for August which increased by 0.5% monthly and by 1.0% annualized. The French Harmonized CPI for September decreased by 0.4% monthly and increased by 1.1% annualized. Economists predicted a decrease of 0.4% monthly and an increase of 1.1% annualized. Forex traders can compare this to the French Harmonized CPI for August which increased by 0.5% monthly and by 1.3% annualized.
- German ZEW Survey and Eurozone ZEW Survey: The German ZEW Survey Current Situation Index for October is predicted at -26.0 and the German ZEW Survey Economic Expectations Index at -27.0. Forex traders can compare this to the German ZEW Survey Current Situation Index for September which was reported at -19.9 and to the German ZEW Survey Economic Expectations Index which was reported at -22.5. The Eurozone ZEW Survey Economic Sentiment Index for October is predicted at -33.0. Forex traders can compare this to the Eurozone ZEW Survey Economic Sentiment Index for September which was reported at -22.4.
Here are the key factors to keep in mind today for Japanese Yen trades:
- Japanese Industrial Production and Capacity Utilization: Final Japanese Industrial Production for August decreased by 1.2% monthly and by 4.7% annualized. Forex traders can compare this to previous Japanese Industrial Production for August which decreased by 1.2% monthly and by 4.7% annualized. Capacity Utilization for August decreased by 2.9% monthly. Forex traders can compare this to Capacity Utilization for July which increased by 1.1% monthly.
- Japanese Tertiary Industry Index: The Japanese Tertiary Industry Index for August increased by 0.4% monthly. Economists predicted an increase of 0.6% monthly. Forex traders can compare this to the Japanese Tertiary Industry Index for July which increased by 0.1% monthly.
Should price action for the EURJPY remain inside the or breakdown below the 119.200 to 120.000 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 119.400
- Take Profit Zone: 115.850 – 116.550
- Stop Loss Level: 120.700
Should price action for the EURJPY breakout above 120.000 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 120.700
- Take Profit Zone: 121.300 – 122.300
- Stop Loss Level: 120.000
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