Forex Market: EUR/JPY daily forecast

Yesterday’s trade saw EUR/JPY within the range of 136.59-136.94. The pair closed at 136.80, losing 0.10% on a daily basis.

At 7:11 GMT today EUR/JPY was up 0.01% for the day to trade at 136.73. The pair touched a daily high at 136.90 during early Asian session.

Fundamental view

Euro zone

The gauge of economic sentiment in Germany probably plunged to 18.2 in August, according to the median forecast by experts. In July the index came in at a reading of 27.10. The indicator has been falling since January this year.

The ZEW (Zentrum für Europäische Wirtschaftsforschung) economic expectations index is published on a monthly basis. The study encompasses up to 350 financial and economic analysts. The indicator reflects the difference between the share of analysts, that are optimistic and those, that are pessimistic about the expected economic development in Germany over the next six months. A positive value indicates that the proportion of optimists is larger than that of pessimists. A ZEW reading of -100 suggests that all analysts are pessimistic about the current developments and expect economic conditions to deteriorate. A ZEW reading of 100 implies that all analysts are optimistic about the current situation and expect conditions to improve. A ZEW reading of 0 indicates neutrality.

The index of current assessment in Germany probably dropped to 55.5 in August from 61.8 in the prior month.

In addition, the ZEW economic sentiment index in the Euro zone probably fell to 41.3 this month from 48.1 during July.

Higher-than-projected readings would certainly provide a boost to the common currency. The official data is scheduled to be released at 9:00 GMT.

Japan

At 23:50 GMT Bank of Japan will release the minutes from its meeting on policy, held on August 8th. The minutes offer detailed insights on central bank’s monetary policy stance. This release is closely examined by traders, as it may provide clues over interest rate decisions in the future. Moderate-to-high volatility is usually present after the publication. In case the minutes show a hawkish outlook, this usually supports the yen, while a dovish outlook usually has a bearish effect on the national currency.

Nations annualized preliminary Gross Domestic Product probably shrank 7.1% during the second quarter of the year, following a 6.7% expansion in Q1. The GDP probably contracted 1.8% in Q2 compared to Q1. In case Japans economy shrank more than expected, this would mount selling pressure on the yen. Japanese Cabinet Office is scheduled to publish the preliminary GDP estimate at 23:50 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 136.78. In case EUR/JPY manages to breach the first resistance level at 136.96, it will probably continue up to test 137.13. In case the second key resistance is broken, the pair will probably attempt to advance to 137.31.

If EUR/JPY manages to breach the first key support at 136.61, it will probably continue to slide and test 136.43. With this second key support broken, the movement to the downside will probably continue to 136.26.

The mid-Pivot levels for today are as follows: M1 – 136.35, M2 – 136.52, M3 – 136.70, M4 – 136.87, M5 – 137.05, M6 – 137.22.

In weekly terms, the central pivot point is at 136.83. The three key resistance levels are as follows: R1 – 137.92, R2 – 139.01, R3 – 140.10. The three key support levels are: S1 – 135.74, S2 – 134.65, S3 – 133.56.