EUR/JPY Fundamental Forecast – February 8, 2016

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Published: Feb 5, 2016, 05:52 UTC

Analysis and Recommendations: The EUR/JPY dipped 30 points to trade at 130.59 as the yen continued to rally on safe haven trades and the euro gave back

EUR/JPY Fundamental Forecast – February 8, 2016

Analysis and Recommendations:

The EUR/JPY dipped 30 points to trade at 130.59 as the yen continued to rally on safe haven trades and the euro gave back some of its shocking gains from the last two days. Asian equities were subdued on Friday and the dollar wobbled ahead of the closely watched US jobs report, which could provide clues on the US Federal Reserve’s monetary policy outlook.

The euro was steady at $1.1200 and headed for a 3.4% gain for the week, its biggest in more than four years. The markets will look to the US jobs data for direction, with the employment report expected to how employers adding 190,000 jobs in January, the median estimate of 108 economists polled by Reuters.

Market expectations for euro exchange rates over the next three months flipped on Thursday into positive territory for the first time since 2012, a headache for euro zone officials hoping for a boost to growth from a weaker currency.

Steady progress since October, allied to the drop in the dollar’s value on Wednesday, mean that 1-, 2- and 3-month euro/dollar risk reversals — a gauge of bets on a currency rising or falling — now price in a gain in the euro, according to Reuters data.

The pricing of options of six-months durations and beyond has also shifted from backing further strong falls in the euro to close to 50-50 odds on whether it will rise or fall.

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:

Cur.	Event	Actual	Forecast	Previous
AUD	Retail Sales (MoM) (Dec)		0.5%	0.4%
USD	Nonfarm Payrolls (Jan)		190K	292K
USD	Unemployment Rate (Jan)		5.0%	5.0%
CAD	Employment Change (Jan)		5.5K	22.8K
CAD	Ivey PMI (Jan)		50.0	49.9