With today’s FOMC meeting out of the US in focus, Eurozone confidence and inflation data will dominate the European trading session. Economists predict subdued inflationary figures and a further slowdown in confidence across the Eurozone in all sectors. Should predictions be confirmed, how will price action in the EURJPY react? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Retail sales out of Japan surged in September and beat economists expectations for a good performance. Analysts are now trying to determine if this is a one-month anomaly or if Japanese consumer will continue to spend. The EURJPY hovered at resistance as forex traders await key Eurozone economic data as well the as press conference following the FOMC announcement. How will this currency pair be impacted? 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:
- French GDP: The Preliminary French GDP for the third-quarter increased by 0.3% quarterly and by 1.3% annualized. Economists predicted an increase of 0.2% quarterly and of 1.3% annualized. Forex traders can compare this to the second-quarter GDP which increased by 0.3% quarterly and by 1.4% annualized.
- French Consumer Spending: French Consumer Spending for September is predicted to increase by 0.1% monthly. Forex traders can compare this to French Consumer Spending for August which was reported flat at 0.0% monthly.
- Italian Confidence Data: Italian Business Confidence for October is predicted at 98.5 and Italian Consumer Confidence is predicted at 111.7. Forex traders can compare this to Italian Business Confidence for September which was reported at 98.8 and to Italian Consumer Confidence which was reported at 112.2.
- Preliminary Spanish CPI: The Preliminary Spanish CPI for October is predicted flat at 0.0% monthly and to increase by 0.1% annualized. Forex traders can compare this to the Spanish CPI for September which was reported flat at 0.0% monthly and which increased by 0.1% annualized. Spanish Harmonized CPI for October is predicted to increase by 0.8% monthly and by 0.2% annualized. Forex traders can compare this to the Spanish Harmonized CPI for September which increased by 0.4% monthly and by 0.2% annualized.
- German Unemployment Change and German Unemployment Rate: The German Unemployment Change for October is predicted at 2K and the German Unemployment Rate at 5.0%. Forex traders can compare this to the German Unemployment Change for September which was reported at -10K and to the German Unemployment Rate which was reported at 5.0%.
- Eurozone Confidence Data: Eurozone Economic Confidence for October is predicted at 101.1. Forex traders can compare this to Eurozone Economic Confidence for September which was reported at 101.7. Eurozone Industrial Confidence for October is predicted at -8.7. Forex traders can compare this to Eurozone Industrial Confidence for September which was reported at -8.8. Eurozone Services Confidence for October is predicted at 9.3. Forex traders can compare this to Eurozone Services Confidence for September which was reported at 9.5. Final Eurozone Consumer Confidence for October is predicted at -7.6. Forex traders can compare this to the previous Eurozone Consumer Confidence for October which was reported at -7.6. The Eurozone Business Climate Indicator for October is predicted at -0.23. Forex traders can compare this to Eurozone Business Climate Indicator for September which was reported at -0.22.
- Preliminary German CPI: The Preliminary German CPI for October is predicted flat at 0.0% monthly and to increase by 1.1% annualized. Forex traders can compare this to the German CPI for September which was reported flat at 0.0% monthly and which increased by 1.2% annualized. The EU Harmonized German CPI for October is predicted flat at 0.0% monthly and to increase by 0.8% annualized. Forex traders can compare this to the EU Harmonized German CPI for September which decreased by 0.1% monthly and which increased by 0.9% annualized.
Here is the key factor to keep in mind today for Japanese Yen trades:
- Japanese Retail Trade Data: Japanese Retail Trade for September increased by 7.1% monthly and by 9.1% annualized. Economists predicted an increase of 3.5% monthly and of 6.0% annualized. Forex traders can compare this to Japanese Retail Trade for August which increased by 4.6% monthly and by 1.8% annualized. Large Retailer’s Sales for September increased by 10.0% monthly. Economists predicted an increase of 9.4% monthly. Forex traders can compare this to Large Retailer’s Sales for August which increased by 0.3% monthly.
Should price action for the EURJPY remain inside the or breakdown below the 120.800 to 121.350 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 121.000
- Take Profit Zone: 117.650 – 118.450
- Stop Loss Level: 122.300
Should price action for the EURJPY breakout above 121.350 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 122.300
- Take Profit Zone: 123.750 – 124.300
- Stop Loss Level: 121.350
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