EUR/JPY Weekly Fundamental Analysis July 23-27, 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 painted a pitiful story this week as the euro continued to weaken as investors turned negative to any assets associated with the eurozone, as Spain’s borrowing costs climbed. The German Constitutional Court announced it would not make a final decision on the legality of the ESM until September 12th

Date

Last

Open

High

Low

Change %

Jul 20, 2012

95.41

96.67

96.68

95.35

-1.30%

Jul 19, 2012

96.67

96.74

96.82

96.13

-0.07%

Jul 18, 2012

96.74

97.24

97.31

96.48

-0.51%

Jul 17, 2012

97.24

96.70

97.38

96.41

0.55%

Jul 16, 2012

96.71

96.98

96.99

96.17

-0.28%

With traders running for safety the JPY continues to be the prime safe harbor reaching worrisome highs against the USD. There was no hope for the euro against the strenght of the JPY. Even promises and threats from the Japanese Finance Minister, could not help support the pair.

This coming week, has little on the calendar outside of the Trade Balance due on the 24th. Towards the end of the week a speech by the Bank of Japan Governor might give us an insight to the thinking of the BoJ and the MoF.

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 16 – 20 actual v. forecast for Yen, the Aussie, the Kiwi and USD

Date

Currency

Event 

Actual

Forecast

Previous

Jul 16

USD

Core Retail Sales m/m

-0.4%

0.1%

-0.4%

 

USD

Retail Sales m/m

-0.5%

0.1%

-0.2%

 

USD

Empire State Manufacturing Index

7.4

3.9

2.3

 

USD

Business Inventories m/m

0.3%

0.2%

0.3%

 

NZD

CPI q/q

0.3%

0.5%

0.5%

Jul 17

AUD

New Motor Vehicle Sales m/m

-0.6%

 

2.3%

 

USD

Core CPI m/m

0.2%

0.2%

0.2%

 

USD

CPI m/m

0.0%

0.0%

-0.3%

 

USD

TIC Long-Term Purchases

55.0B

45.7B

27.2B

 

USD

Capacity Utilization Rate

78.9%

79.2%

78.7%

 

USD

Industrial Production m/m

0.4%

0.4%

-0.2%

Jul 18

AUD

MI Leading Index m/m

0.8%

 

0.5%

 

USD

Building Permits

0.76M

0.77M

0.78M

 

USD

Housing Starts

0.76M

0.74M

0.71M

 

USD

Crude Oil Inventories

-0.8M

0.5M

-4.7M

Jul 19

AUD

NAB Quarterly Business Confidence

-2

 

-1

 

USD

Unemployment Claims

386K

367K

352K

 

USD

Existing Home Sales

4.37M

4.64M

4.62M

 

USD

Philly Fed Manufacturing Index

-12.9

-7.9

-16.6

Jul 20

AUD

Import Prices q/q

2.4%

1.6%

-1.2%

 

Historical:

Highest: 156.83 JPY on Sep 22, 2008

Average: 118.28 JPY over this period.

Lowest: 95.61 JPY on Jun 01, 2012 

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

Date

Time

Currency

 Event

Previous

Jul 23

1:30

AUD

PPI q/q

-0.3%

Jul 24

13:00

USD

Flash Manufacturing PMI

52.5

22:45

NZD

Trade Balance

301M

23:50

JPY

Trade Balance

-0.66T

Jul 25

0:00

AUD

CB Leading Index m/m

-1.4%

1:30

AUD

CPI q/q

0.1%

1:30

AUD

Trimmed Mean CPI q/q

0.3%

14:00

USD

New Home Sales

369K

14:30

USD

Crude Oil Inventories

 

21:00

NZD

Official Cash Rate

2.50%

21:00

NZD

RBNZ Rate Statement

 

Jul 26

0:10

JPY

BOJ Gov Shirakawa Speaks

 

12:30

USD

Core Durable Goods Orders m/m

0.7%

12:30

USD

Unemployment Claims

 

14:00

USD

Pending Home Sales m/m

5.9%

23:30

JPY

Tokyo Core CPI y/y

-0.6%

23:50

JPY

Retail Sales y/y

3.6%

Jul 27

12:30

USD

Advance GDP q/q

1.9%

13:55

USD

Revised UoM Consumer Sentiment

72.0

 

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About:FX Empire Analyst - Barry Norman

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