EUR/JPY Weekly Fundamental Analysis July 16-20, 2012, Forecast

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Introduction: This is one of the most popular crosses. The primary reason why EUR/JPY has rallied 11 percent over the past 3.5 months is because of US growth – not many people realize that the price action of EUR/JPY is directly correlated with how the US economy is doing.

Weekly Analysis and Recommendations:

The EUR/JPY closed the week at 96.98. The pair tumbled most of the week as the euro was under considerable pressure. The euro hit 2 year lows against the USD sinking to trade under the 1.22 price.

Date

Last

Open

High

Low

Change %

Jul 13, 2012

96.98

96.69

97.10

96.45

0.31%

Jul 12, 2012

96.69

97.48

97.86

96.43

-0.81%

Jul 11, 2012

97.48

97.26

97.74

97.01

0.23%

Jul 10, 2012

97.26

97.99

98.01

97.22

-0.75%

Jul 09, 2012

97.99

97.55

98.13

97.52

0.45%

Markets are adding risk back into their portfolio on relief that China’s economic data releases were not as bad as the whisper but also on the hope that they were bad enough to increase both monetary and fiscal stimulus. Moody’s downgrade of Italy from A3 to Baa2, outlook negative, has had limited market impact. In this environment, risk assets like equities and commodities are strong; while the stronger sovereign bond yields and the USD are weak. Outperforming are the commodity currencies.

FxEmpire provides in-depth analysis for each currency and commodity 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 recent analysis and information in our weekly reports and we provide daily updates and outlooks

Major Economic Events for the week of July 9 – 13 actual v. forecast for Yen, the Aussie, the Kiwi and USD

Date

Currency

 Event

Actual

Forecast

Previous

Jul 9

AUD

ANZ Job Advertisements m/m

-1.2%

 

-2.6%

NZD

REINZ HPI m/m

0.3%

 

1.7%

NZD

NZIER Business Confidence

-4

 

13

Jul 10

AUD

NAB Business Confidence

-3

 

-2

JPY

Tertiary Industry Activity m/m

0.7%

0.2%

-0.2%

Jul 11

AUD

Westpac Consumer Sentiment

3.7%

 

0.3%

AUD

Home Loans m/m

-1.2%

0.8%

0.5%

USD

Trade Balance

-48.7B

-48.5B

-50.6B

USD

Crude Oil Inventories

-4.7M

-1.3M

-4.3M

Jul 12

AUD

MI Inflation Expectations

3.3%

 

2.3%

 

AUD

Employment Change

-27.0K

0.2K

27.8K

AUD

Unemployment Rate

5.2%

5.2%

5.1%

JPY

Overnight Call Rate

<0.10%

<0.10%

<0.10%

USD

Unemployment Claims

350K

376K

376K

USD

Import Prices m/m

-2.7%

-1.5%

-1.2%

USD

Federal Budget Balance

-59.7B

-91.7B

-124.6B

Jul 13

USD

PPI m/m

0.1%

-0.5%

-1.0%

USD

Prelim UoM Consumer Sentiment

72.0

73.5

73.2

 

Historical:

Highest: 156.83 JPY on Sep 22, 2008

Average: 118.28 JPY over this period.

Lowest: 95.61JPY on Jun 01, 2012

Economic Highlights of the coming week that affect the AUD, JPY, NZD and USD

Date

Time

Currency

 Event

Previous

Jul 16

12:30

USD

Retail Sales m/m

-0.2%

12:30

USD

Empire State Manufacturing Index

2.3

14:00

USD

Business Inventories m/m

0.4%

22:45

NZD

CPI q/q

0.5%

Jul 17

1:30

AUD

New Motor Vehicle Sales m/m

2.4%

9:15

ALL

G7 Meetings

 

12:30

USD

CPI m/m

-0.3%

13:00

USD

TIC Long-Term Purchases

25.6B

13:15

USD

Capacity Utilization Rate

79.0%

13:15

USD

Industrial Production m/m

-0.1%

Jul 18

0:30

AUD

MI Leading Index m/m

0.5%

12:30

USD

Building Permits

0.78M

12:30

USD

Housing Starts

0.71M

14:30

USD

Crude Oil Inventories

-4.7M

Jul 19

1:30

AUD

NAB Quarterly Business Confidence

-1

12:30

USD

Unemployment Claims

 

14:00

USD

Existing Home Sales

4.55M

14:00

USD

Philly Fed Manufacturing Index

-16.6

Jul 20

1:30

AUD

Import Prices q/q

-1.2%

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About: FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

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