EUR/JPY Weekly Fundamental Analysis October 1-5, 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 100.19 as the euro continues to decline against the safe haven JPY.

The euro received a mild boost and regained the 100.00 level versus the yen, after the latest stress test of Spanish banks showed the sector would need €59.3 billion in capital injections in the worse scenario, in line with expectations. EUR/JPY rose to the 100.45 zone after the results, extending its recovery from lows around 99.90. At time of writing, the pair is trading at the 100.30 region, where it is virtually unchanged since opening.

Date

Last

Open

High

Low

Change %

Sep 28, 2012

100.19

100.23

100.67

99.93

-0.03%

Sep 27, 2012

100.22

100.06

100.36

99.65

0.17%

Sep 26, 2012

100.06

100.28

100.47

99.72

-0.22%

Sep 25, 2012

100.28

100.78

101.05

100.17

-0.49%

Sep 24, 2012

100.77

101.31

101.41

100.36

-0.53%

However, the euro still faces risk of a Spanish downgrade by Moody’s which decision is still looming and it is likely to be announced later today or next week. 

The Japanese government is trying everything in their power to reduced the strength of the yen, rumor has it that they are intervening in the currency markets, and also buying foreign bonds.
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 September 24-28, 2012 actual v. forecast for Yen, the Aussie, the Kiwi and USD

Date

Currency

Event

Actual

Forecast

Previous

 Sep. 25

USD

CB Consumer Confidence 

70.3

63.0 

61.3 

 

NZD

Trade Balance 

-789M

-606M 

97M 

Sep. 26

NOK

Norwegian Unemployment Rate 

3.00%

3.00% 

3.10% 

 

MXN

Mexican Trade Balance 

-0.980B

-0.556B 

-0.427B 

 

USD

New Home Sales 

373K

380K 

374K 

Sep. 27 

USD

Core Durable Goods Orders (MoM) 

-1.6%

0.3% 

-1.3% 

 

USD

Durable Goods Orders (MoM) 

-13.2%

-5.0% 

3.3% 

 

USD

Initial Jobless Claims 

359K

378K 

385K 

 

USD

GDP (QoQ) 

1.3%

1.7% 

1.7% 

 

USD

Continuing Jobless Claims 

3271K

3285K 

3275K 

 

USD

Pending Home Sales (MoM) 

-2.6%

-0.7% 

2.6% 

 

NZD

Building Consents (MoM) 

1.9%

3.0% 

2.0% 

 Sep. 28 

JPY

Tokyo Core CPI (YoY) 

-0.4%

-0.3% 

-0.5% 

 

JPY

Industrial Production (MoM) 

-1.3%

-0.5% 

-1.0% 

 

JPY

Retail Sales (YoY) 

1.8%

-0.2% 

-0.8% 

 

USD

Core PCE Price Index (MoM) 

0.1%

0.1% 

0.1% 

 

USD

Personal Spending (MoM) 

0.5%

0.5% 

0.4% 

 

USD

Chicago PMI 

49.7

53.0 

53.0 

 

USD

Michigan Consumer Sentiment 

78.3

79.0 

79.2 

 

Historical: From 2010 to Present

Highest: 0.8842 USD on Aug 01, 2011.

Average: 0.7543 USD over this period.

Lowest: 0.6562 USD on May 25, 2010.

 

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

Date

Time

Currency

Event

Forecast

Previous

Oct. 01

00:50

JPY

Tankan Large Manufacturers Index 

-3

-1

 

15:00

USD

ISM Manufacturing Index 

49.8

49.6

Oct. 02

05:30

AUD

Interest Rate Decision 

3.50%

3.50%

Oct. 03

02:30

AUD

Trade Balance 

-0.70B

-0.56B

Oct. 04

02:30

AUD

Building Approvals (MoM) 

4.7%

-17.3%

 

02:30

AUD

Retail Sales (MoM) 

0.4%

-0.8%

Government Bond Auction

Date Time Country 

Oct 01 10:00 Norway 

Oct 02 09:15 Austria 

Oct 02 09:30 Belgium 

Oct 02 09:30 UK 

Oct 02 14:30 UK 

Oct 03 09:10 Sweden 

Oct 03 10:00 Norway 

Oct 04 08:30 Spain 

Oct 04 08:50 France 

Oct 04 15:00 US 

Oct 05 15:30 Italy 

 

 

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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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