The People’s Bank of China decided to decrease the interest rate on its 1-Year Loan Prime Rate by 5 basis points to 4.20%, but countered this move by a 5 basis point increase in its 1-Year Loan Prime Rate to 4.85%. This surprised markets today where the overall mood is geared towards risk-off. German PPI data showed a monthly increase, but pointed towards an annualized slowdown. The EURJPY is drifting lower after moving into resistance, what impact will today’s advance consumer confidence data out of the Eurozone have on price action? Subscribe to the PaxForex Daily Fundamental Analysis and take the profitable side of this trade.
Japanese CPI data released during the Asian trading session pointed towards the absence of inflationary pressures. The Bank of Japan raised concerns that momentum to achieve its inflation target of 2.0% is fading. The Japanese Yen did catch bids as forex traders are lowering risk heading into the weekend. Bearish momentum is on the rise, can the EURJPY complete a breakdown below resistance? Today’s fundamental analysis will explore the downside potential and take a look at the upside risk in this currency pair.
Here are the key factors to keep in mind today for Euro trades:
- German PPI: The German PPI for August increased by 0.5% monthly and by 0.3% annualized. Economists predicted a decrease of 0.2% monthly and an increase of 0.6% annualized. Forex traders can compare this to the German PPI for July which increased by 0.1% monthly and by 1.1% annualized.
- Advanced Eurozone Consumer Confidence: Advanced Eurozone Consumer Confidence for September is predicted at -7.0. Forex traders can compare this to the previous Eurozone Consumer Confidence for September which was reported at -7.1.
Here are the key factors to keep in mind today for Japanese Yen trades:
- Japanese National CPI: The Japanese National CPI for August increased by 0.3% annualized. Economists predicted an increase of 0.3% annualized. Forex traders can compare this to the Japanese National CPI for July which increased by 0.5% annualized. The Japanese National Core CPI for August increased by 0.6% annualized. Economists predicted an increase of 0.5% annualized. Forex traders can compare this to the Japanese National Core CPI for July which increased by 0.6% annualized. The Japanese National CPI Excluding Fresh Food for August increased by 0.5% annualized. Economists predicted an increase of 0.5% annualized. Forex traders can compare this to the Japanese National CPI Excluding Fresh Food for July which increased by 0.6% 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 September 13th was reported at ¥476.0B and Japanese Buying Foreign Stocks was reported at ¥63.9B. Forex traders can compare this to Japanese Buying Foreign Bonds for the period ending September 6th which was reported at ¥727.2B and to Japanese Buying Foreign Stocks which was reported at -¥25.4B. Foreign Buying Japanese Bonds for the period ending September 13th was reported at ¥1,269.5B and Foreigners Buying Japanese Stocks was reported at -¥971.9B. Forex traders can compare this to Foreign Buying Japanese Bonds for the period ending September 6th which was reported at ¥441.1B and to Foreigners Buying Japanese Stocks which was reported at -¥161.3B.
Should price action for the EURJPY remain inside the or breakdown below the 118.950 to 119.800 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 119.250
- Take Profit Zone: 115.850 – 116.550
- Stop Loss Level: 120.700
Should price action for the EURJPY breakout above 119.800 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 120.700
- Take Profit Zone: 122.300 – 123.350
- Stop Loss Level: 119.800
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