EUR/JPY Weekly Fundamental Analysis October 22-26, 2012 Forecast

Posted October 20, 2012 8:51 (GMT) | By FX Empire Analyst - Barry Norman | Print | Font Size
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EUR/JPY Weekly Fundamental Analysis October 22-26, 2012 Forecast

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 climbed from its opening on Monday at 101.51 to close the week at 103.28. The JPY weakened all week as the BoJ meeting approached. The euro on the other hand strengthened on hopes for Spain and Greece. The EU Summit once again disappointed traders as the closing release said little of any action. This was followed by statements from the Prime Minister of Spain saying that at this time he would not be asking for a bailout. Dire warnings were also issued by Angela Merkel in regards to the banking supervisor program. Greece was given additional time, but riots in the streets of Athens said this was not enough to help the citizens.

Date	Last	Open	High	Low	Change %
Oct 19, 2012	103.28	103.66	103.80	103.15	-0.36%
Oct 18, 2012	103.66	103.67	104.14	103.30	-0.01%
Oct 17, 2012	103.67	103.35	103.75	102.92	0.30%
Oct 16, 2012	103.35	102.18	103.51	102.06	1.15%
Oct 15, 2012	102.18	101.51	102.29	101.04	0.65%

The euro fell on Friday on disappointment but was still able to pick up steam against the JPY. This week we will see retail sales and consumer confidence in Japan, which might dictate the actions of the BoJ.

Mr. Draghi will make an address, which might be harsh over the outcome of the EU Summit.

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 October 15-19, 2012 actual v. forecast for Yen, the Aussie, the Kiwi and USD

Date	Currency	Event	Actual	Forecast	Previous
Oct. 15	AUD	Home Loans (MoM)	1.8%	1.4%	-0.7%
	CNY	Chinese CPI (YoY)	1.9%	1.9%	2.0%
	CNY	Chinese PPI (YoY)	-3.6%	-3.6%	-3.5%
	CNY	Chinese CPI (MoM)	0.3%	0.4%	0.6%
	JPY	Industrial Production (MoM)	-1.6%	-1.3%	-1.3%
	USD	Core Retail Sales (MoM)	1.1%	0.6%	1.0%
	USD	Retail Sales (MoM)	1.1%	0.8%	1.2%
	USD	NY Empire State Manufacturing Index	-6.2	-4.5	-10.4
	NZD	CPI (QoQ)	0.3%	0.6%	0.3%
Oct. 16	USD	Core CPI (MoM)	0.1%	0.2%	0.1%
	USD	CPI (MoM)	0.6%	0.5%	0.6%
	USD	CPI (YoY)	2.0%	1.9%	1.7%
	USD	Core CPI (YoY)	2.0%	2.0%	1.9%
	USD	TIC Net Long-Term Transactions	90.0B	45.3B	67.2B
	USD	Industrial Production (MoM)	0.4%	0.2%	-1.4%
Oct. 17	USD	Building Permits	0.894M	0.810M	0.801M
	USD	Housing Starts	0.872M	0.770M	0.758M
Oct. 18	AUD	NAB Quarterly Business Confidence	-2.00		-2.00
	CNY	Chinese Fixed Asset Investment (YoY)	20.5%	20.2%	20.2%
	CNY	Chinese GDP (YoY)	7.4%	7.4%	7.6%
	CNY	Chinese Industrial Production (YoY)	9.2%	9.0%	8.9%
	CNY	Chinese Retail Sales (YoY)	14.2%	13.2%	13.2%
	USD	Initial Jobless Claims	388K	365K	342K
	USD	Continuing Jobless Claims	3252K	3275K	3281K
	USD	Philadelphia Fed Manufacturing Index	5.7	1.0	-1.9
Oct. 19	USD	Existing Home Sales	4.75M	4.75M	4.82M

Historical: From 2010 to Present

Highest: 134.38 JPY on Jan 11, 2010

Average: 111.13 JPY over this period.

Lowest: 94.12 JPY on July 24, 2012

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

Date	Time	Currency	Event	Forecast	Previous
Oct. 24	01:30	AUD	CPI (QoQ)	1.1%	0.5%
	01:30	AUD	Trimmed Mean CPI (QoQ)	0.6%	0.5%
	02:45	CNY	Chinese HSBC Manufacturing PMI		47.90
	15:00	USD	New Home Sales	385K	373K
	21:00	NZD	Interest Rate Decision	2.50%	2.50%
Oct. 25	22:45	NZD	Trade Balance	-825M	-789M
Oct. 26	00:30	JPY	Tokyo Core CPI (YoY)	-0.5%	-0.4%

Government Bond Auction

Date Time Country

Oct 22 09:10 Norway

Oct 23 08:30 Spain

Oct 23 14:30 UK

Oct 23 17:00 US

Oct 24 09:10 Sweden

Oct 24 09:30 Germany

Oct 24 14:30 Sweden

Oct 24 15:30 Italy

Oct 24 16:30 US

Oct 25 00:30 Japan

Oct 25 09:10 Sweden

Oct 25 15:30 Italy

Oct 25 17:00 US

Oct 26 09:10 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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