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

Posted July 14, 2012 13:55 (GMT) | By FX Empire Analyst - Barry Norman | Print | Font Size
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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
Jul 10	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%
Jul 13	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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