With many forex traders extended their holidays throughout the Christmas period into the New Year, trading activity remains muted with lackluster volume. Economic reports over the next few trading session are expected to stir up volatility. Singapore reminded traders today that the global economic slowdown continues at an accelerated pace with a severe contraction in industrial production. The SGDJPY remained inside its horizontal resistance area, but where will price action be headed next? Today’s fundamental analysis will take a look at the upside potential as well as the downside risk in this currency pair.

The slowdown was also evident in the Japanese housing market, with a fall in housing starts greater than what economists anticipated. New construction orders also declined. The Japanese Yen tops the list of safe-haven currencies and forex traders may flock to it as more economic disappointments are released. Will the SGDJPY be forced into a retreat by bears or can bulls force a breakout? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.