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Forex Market: EUR/JPY daily forecast

During Friday’s trading session EUR/JPY traded within the range of 141.65-142.41 and closed at 141.73.

At 7:31 GMT EUR/JPY traded at 141.63, losing 0.07% for the day. The pair broke the first key support and touched a daily low at 141.29 during the early phase of Asian trade.

Fundamental view

Euro zone

Confidence among investors in the Euro zone probably improved during the current month, with the corresponding index coming in at a reading of 14.2. In April it stood at 14.1. The index is based on results from the SENTIX survey, one of the most prominent surveys, reflecting investors’ opinion in Germany. It encompasses 2 400 respondents, with 510 of them being institutional investors. Respondents present their expectations regarding ten different markets for a period of one and six months. The value of the index is evaluated, as the number of investors projecting a surge in a given market is subtracted from the number of those projecting a drop and the resulting difference is divided by the total number of respondents. Higher than expected readings would be supportive for the euro. The official result is expected at 8:30 GMT.

The annualized index of producer prices (PPI) in the Euro zone probably reached -1.8% in March, according to the median estimate by experts, from -1.7% in February. This index reflects the change in prices of products, sold by manufacturers during the respective period. The PPI differs from the CPI, which measures the change in prices from consumer’s perspective, due to subsidies, taxes and distribution costs of different types of manufacturers in the region. In case producers are forced to pay more for goods and services, they are more likely to pass these higher costs to the end consumer. Therefore, the PPI is considered as a leading indicator of consumer inflation. Lower than expected producer prices would have a bearish effect on the euro. Eurostat is to release the official report at 9:00 GMT.

Japan

Today is Japans Childrens Day holiday, which has been celebrated since 1948. It is based on a tradition from the 8th century to celebrate childrens day twice per year – on March 3rd for girls and on May 5th for boys. On May 5th, also known as ”tango-no sekku”, Japanese people fly carp streamers or ”koinobori” outside, display Samurai dolls and eat ”chimaki”. Banks in the country will remain closed.

Technical view

eur-jpy

According to Binary Tribune’s daily analysis, in case EUR/JPY manages to breach the first resistance level at 142.21, it will probably continue up to test 142.69. In case the second key resistance is broken, the pair will probably attempt to advance to 142.97.

If EUR/JPY manages to breach the first key support at 141.45, it will probably continue to slide and test 141.17. With this second key support broken, the movement to the downside will probably continue to 140.69.

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