EUR/JPY Fundamental Forecast – August 25 2016

The EUR/JPY continued to flat-line on the daily chart, closing at 113.217, down 0.115 or -0.10% on Wednesday. This price action has been widely anticipated since both the Euro and the Japanese Yen are funding currencies, competing for the same investment dollar.

Early Wednesday, reports out of Japan had very little impact on the price action with the country’s final leading index rising to a level of 99.2 in June, from a reading of 98.4 in the previous month. This news was released in conjunction with the nation’s final coincident index, which advanced to a level of 111.1 in June versus a reading of 110.5 in the prior month.

The Euro, however, was underpinned by stronger-than-expected German GDP data. This report showed German GDP grew by 0.4 percent in the three months to June, powered by strong export performance and a rise in government spending.

Domestic consumption, which has been powering the economy for the last 18 months, added 0.2 percentage points, while investment contributed negatively, deducting 0.4 percentage points from the GDP numbers. Additionally, government spending also beat expectations, rising 0.6 percent in the quarter and adding 0.1 points to growth.

We’re looking for the EUR/JPY to continue its sideways price action until the next European Central Bank meeting on September 8.

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.

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Thursday, August 25, 2016

Government Bond Auctions

Date/Time Country Type

Aug 24 10:03 Sweden Holds bond auction

Aug 24 10:30 Germany Eur 4bn 0% Oct 2021 Bobl

Aug 24 18:00 US Holds 2yr FRN auction & 5yr note auction

Aug 25 18:00 US Holds 7yr note auction

Aug 26 10:10 Italy Holds zero coupon