Forex traders will get a heavy dose of Eurozone economic data to close out the trading week. Confidence data will be front and center, economists expect little change from the previous month. The German Import Price Index showed deflationary pressures in the Eurozone’s biggest economy which will be monitored closely by the ECB. The EURJPY entered a severe sell-off over the past few sessions, how will today’s data flow impact price action? Today’s fundamental analysis will take a look at the upside potential as well as downside risk in this currency pair.
The Japanese Yen has attracted safe haven bids as trade jitters flared up once again, global economic data disappointed and political uncertainty increased in the UK as well as the US. The Bank of Japan is closely monitoring the strength of the Japanese currency as it is hurting its exporters, will the Japanese central bank interfere? With the Trump impeachment process unfolding, will the Japanese Yen get a boost or will traders take profits which will rally the EURJPY? Subscribe to the PaxForex Daily Fundamental Analysis and take the profitable side of this currency pair.
Here are the key factors to keep in mind today for Euro trades:
- German Import Price Index: The German Import Price Index for August decreased by 0.6% monthly and by 2.7% annualized. Economists predicted a decrease of 0.3% monthly and of 2.6% annualized. Forex traders can compare this to the German Import Price Index for July which decreased by 0.2% monthly and by 2.1% annualized.
- French Consumer Spending: French Consumer Spending for August was reported flat at 0.0% monthly. Economists predicted an increase of 0.3%. Forex traders can compare this to French Consumer Spending for July which increased by 0.4% monthly.
- Preliminary French CPI: The Preliminary French CPI for August decreased by 0.3% monthly and increased by 0.9% annualized. Forex traders can compare this to the French CPI for July which increased by 0.5% monthly and by 1.0% annualized. The Preliminary French Harmonized CPI for August decreased by 0.4% monthly and increased by 1.1% annualized. Forex traders can compare this to the French Harmonized CPI for July which increased by 0.5% monthly and by 1.3% annualized.
- French PPI: The French PPI for August was reported flat at 0.0% monthly. Forex traders can compare this to the French PPI for July which increased by 0.4% monthly.
- Spanish Retail Sales: Spanish Retail Sales for August increased by 3.2% annualized. Economists predicted an increase of 2.8%. Forex traders can compare this to Spanish Retail Sales for July which increased by 3.3% annualized.
- Italian Confidence Data: Italian Business Confidence for September is predicted at 100.0 and Italian Consumer Confidence is predicted at 112.6. Forex traders can compare this to Italian Business Confidence for August which was reported at 99.7 and to Italian Consumer Confidence which was reported at 111.9.
- Italian PPI: The Italian PPI for August is predicted flat at 0.0% monthly and to decrease by 1.0% annualized. Forex traders can compare this to the Italian PPI for July which was reported flat at 0.0% monthly and which decreased by 0.5% annualized.
- Eurozone Confidence Data: Eurozone Economic Confidence for September is predicted at 103.0. Forex traders can compare this to Eurozone Economic Confidence for August which was reported at 103.1. Eurozone Industrial Confidence for September is predicted at -5.8. Forex traders can compare this to Eurozone Industrial Confidence for August which was reported at -5.9. Eurozone Services Confidence for September is predicted at 9.4. Forex traders can compare this to Eurozone Services Confidence for August which was reported at 9.3. Final Eurozone Consumer Confidence for September is predicted at -6.8. Forex traders can compare this to the previous Eurozone Consumer Confidence for September which was reported at -6.5. The Eurozone Business Climate Indicator for September is predicted at 0.12. Forex traders can compare this to Eurozone Business Climate Indicator for August which was reported at 0.11.
Here is the key factor to keep in mind today for Japanese Yen trades:
- 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 20th was reported at -¥164.0B and Japanese Buying Foreign Stocks was reported at -¥106.3B. Forex traders can compare this to Japanese Buying Foreign Bonds for the period ending September 13th which was reported at ¥483.4B and to Japanese Buying Foreign Stocks which was reported at ¥63.9B. Foreign Buying Japanese Bonds for the period ending September 20th was reported at -¥3,148.6B and Foreigners Buying Japanese Stocks was reported at -¥1,177.8B. Forex traders can compare this to Foreign Buying Japanese Bonds for the period ending September 13th which was reported at ¥1,269.5B and to Foreigners Buying Japanese Stocks which was reported at -¥971.1B.
Should price action for the EURJPY remain inside the or breakout above the 117.100 to 118.200 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 117.600
- Take Profit Zone: 120.000 – 120.700
- Stop Loss Level: 116.750
Should price action for the EURJPY breakdown below 117.100 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 116.750
- Take Profit Zone: 114.850 – 115.850
- Stop Loss Level: 117.100
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