Forex Market: EUR/JPY daily forecast

During Friday’s trading session EUR/JPY traded within the range of 137.56-138.01 and closed at 137.79, gaining 0.11% for the day.

At 7:48 GMT today EUR/JPY was losing 0.02% for the day to trade at 137.77. The pair touched a daily high at 137.61 at 1:45 GMT.

Fundamental view

Confidence among investors in the Euro zone was probably lower during the current month, with the corresponding index coming in at a reading of 9.0. In July it stood at 10.1. The index is based on results from the SENTIX survey, one of the most prominent surveys, reflecting investors’ opinion in Germany. It encompasses 2 800 respondents, with 510 of them being institutional investors. Respondents present their expectations regarding ten different markets for a period of one and six months. Readings above zero indicate that respondents were predominantly optimistic, while readings below zero show pessimism. Higher than expected readings would provide support to the common currency. The official result is expected at 8:30 GMT.

At the same time, the annualized index of producer prices (PPI) in the Euro zone probably reached -1.0% in June, according to the median estimate by experts, from -1.0% in May. This index reflects the change in prices of products, sold by manufacturers during the respective period. The PPI differs from the CPI, which measures the change in prices from consumer’s perspective, due to subsidies, taxes and distribution costs of different types of manufacturers in the region. In case producers are forced to pay more for goods and services, they are more likely to pass these higher costs to the end consumer. Therefore, the PPI is considered as a leading indicator of consumer inflation. Lower than expected producer prices would have a bearish effect on the euro. Eurostat is to release the official report at 9:00 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 137.79. In case EUR/JPY manages to breach the first resistance level at 138.01, it will probably continue up to test 138.24. In case the second key resistance is broken, the pair will probably attempt to advance to 138.46.

If EUR/JPY manages to breach the first key support at 137.56, it will probably continue to slide and test 137.34. With this second key support broken, the movement to the downside will probably continue to 137.11.