EUR/JPY Weekly Fundamental Analysis December 31, 2012 – January 4, 2013, Forecast

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Updated: Aug 21, 2015, 02:00 UTC

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

EUR/JPY Weekly Fundamental Analysis December 31, 2012 – January 4, 2013, 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 closed the week at 113.56 after hitting a multi-year high of 114.67. Traders expected to see it break through the 115 level and that might just happen after the 1^st of the year. As the markets closed for the holidays many traders booked profits turning the euro a bit weaker. The Australian and New Zealand dollars pushed closer to multi-year peaks on a floundering yen on Thursday, but were outpaced by the euro and US dollar as Japan’s new government vowed to weaken its currency.

The market has been selling yen in expectation that Prime Minister Shinzo Abe will force the Bank of Japan into taking far more aggressive policy stimulus that in the past. But investors have seen greater scope for gains by the euro and US currency, lifting them relative to everything else.

Date	Last	Open	High	Low	Change %
Dec 28, 2012	113.56	114.59	114.67	113.30	-0.90%
Dec 27, 2012	114.59	113.37	114.70	113.31	1.08%
Dec 26, 2012	113.36	112.05	113.38	112.05	1.18%
Dec 25, 2012	112.05	111.96	112.09	111.75	0.07%
Dec 24, 2012	111.96	111.27	112.00	111.13	0.63%

The euro is strong simply because of end of year-end flows. Japanese are buying the euro en masse against the yen. Everyone seems to be short yen at the moment which makes me a bit nervous about a pullback.

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 December 24 -28 actual v. forecast for Yen, the Aussie, the Kiwi and USD

Date	Currency	Event	Actual	Forecast	Previous
Dec. 27	USD	Initial Jobless Claims	350K	360K	362K
	USD	Continuing Jobless Claims	3206K	3200K	3238K
	USD	CB Consumer Confidence	65.1	70.0	71.5
	USD	New Home Sales	377K	378K	361K
	JPY	Tokyo Core CPI (YoY)	-0.6%	-0.5%	-0.5%
	JPY	Industrial Production (MoM)	-1.7%	-0.5%	1.6%
	JPY	Retail Sales (YoY)	1.3%	1.1%	-1.2%
Dec. 28	USD	Chicago PMI	51.6	51.0	50.4
	USD	Pending Home Sales (MoM)	1.7%	1.0%	5.0%

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
Jan. 01	01:00	CNY	Chinese Manufacturing PMI	51.00	50.60
Jan. 02	15:00	USD	ISM Manufacturing Index	50.2	49.5