EUR/JPY Weekly Fundamental Analysis July 23-27, 2012, Forecast

Posted July 21, 2012 13:42 (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 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%
Jul 27	13:55	USD	Revised UoM Consumer Sentiment	72.0

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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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