Fundamental Analysis of EUR/JPY for January 15, 2019

EUR/JPY has been struggling to move higher above 125.00 area since it bounced off the 119.00 area with strong bearish rejection recently. EUR has come under pressure as a result of the recent budget deficit and crisis issues. Besides, BREXIT is certainly bearish for the single European currency. So, EUR is likely to extend weakness versus JPY.

Ahead of ECB President Draghi's speech today, French Final CPI report is going to be published which is expected to be unchanged at 0.0% and French Government Budget Balance is going to be published which previously was at -87.0B and expected to have optimistic outcome. Moreover, today the eurozone's Trade Balance report is going to be published which is expected to expand to 13.2B from the previous figure of 12.5B. According to German Private Bank, ECB is missing out the chance of increasing interest rates in the economy cycle while investors are fretted about eurozone's economic slowdown. The ECB is not going to move its policy rates from the record low at least through summer 2019 which has demotivated the market bias from EUR. The ECB stance is another reason behind EUR's weakness.

On the other hand, today JPY M2 Money Stock report was published with an increase to 2.4% as expected from the previous value of 2.3% and Prelim Machine Tool Orders report was published with a decrease to -18.3% from the previous value of -17.0%. Ahead of Governor Kuroda's speech on Thursday, JPY is expected to trade flat ahead of the economic data to be published in the coming days.

Meanwhile, EURO is soft and indecisive ahead of the upcoming economic reports. ECB President Draghi's speech is unlikely to provide EUR with support. Japan's reports are also quite mixed and EUR is losing momentum. Nevertheless, JPY could assert strength in the short term amid sustainable economic growth in Japan.

Now let us look at the technical view. The price is currently residing at the edge of 125.00 being below the area with daily close. The dynamic level of 20 EMA is also expected to act as strong resistance from the price which is expected to lead the price lower towards 119.00-120.00 support area in the future. On the other hand, a break above 125.00 may lead to certain bullish pressure but ultimately it is expected to push lower with the trend in the future. As the price remains below 130.00 area with a daily close, the bearish bias is expected to continue.

SUPPORT: 119.00, 120.00, 122.00

RESISTANCE: 125.00, 127.50, 130.00

BIAS: BEARISH

MOMENTUM: VOLATILE

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The material has been provided by InstaForex Company - www.instaforex.com