EUR/JPY Fundamental Forecast – August 18 2016

The EUR/JPY continued to trade in a tight range on Wednesday, settling at 113.195, in what can best be described as a sideways trend with all eyes focused on the U.S. Federal Reserve’s minutes from the July meeting.

There were no major economic releases from Japan or the Euro Zone on Wednesday, leading to below average volume and volatility. This Forex pair has now been range bound since it reached its lowest level in nearly a month on August 5 at 112.308. However, out of this type of technical chart pattern often rises excessive volatility. That being said, the chart’s picture says investors should start preparing for some surprise news. However, the timing of such an event can’t be predicted at this time.

With the European Central Bank not set to return from summer holiday until September 8 and the Bank of Japan and Japanese government apparently out of ammunition to stimulate the economy, traders are going to have to be patient at this time.

Dominating the news at this time has been verbal interventions. Given the technical chart pattern and the lack of fresh economic news, the focus should be on the frequency of these verbal comments designed to try to weaken the Japanese Yen. If there is going to be a sudden news events, it could come in the form of an intervention that would shock the Yen, but this is highly speculative at this time.

Early Thursday, investors will get the opportunity to react to several reports from Japan including Adjust Trade Balance which is expected to come in at 0.14 Trillion Yen. Japanese Exports are expected to fall 14.0%. The trade balance for July is expected to show a drop from 693 Billion Yen to 284 Billion Yen.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

Upcoming Economic Events that you should be monitoring:

Thursday, August 18, 2016

Government Bond Auctions

Date/Time Country Type

August 18 USD 5-Year TIPS Auction