Forex Market: EUR/JPY daily trading forecast

Yesterday’s trade saw EUR/JPY within the range of 143.30-144.72. The pair closed at 143.65, losing 0.55% on a daily basis.

At 8:11 GMT today EUR/JPY was up 0.33% for the day to trade at 144.13. The pair touched a daily high at 144.32 at 7:35 GMT.

Fundamentals

Euro zone

Italian consumer inflation

Italys final annualized index of consumer prices (CPI) probably improved to 0.1% in October, confirming the preliminary estimate, reported on October 31st. In September consumer prices fell at an annualized rate of 0.2%. According to preliminary data, in October consumer inflation accelerated for the first time in six months as gas and communication prices decreased at a slower rate. Upward pressures came mostly from prices of regulated energy products (-2.6% in October, up from -6.6% in the prior month). Prices of gas dropped 5.9% last month, following an 11.1% plunge in September, while costs of communication services were 1.0% lower in October, following a 5.6% drop in the preceding month.

Key categories, included in Italys Consumer Price Index, are food and non-alcoholic beverages (accounting for 16% of total weight), transport (15%), restaurants and hotels (11%) and housing, water, electricity and other fuels (10%). Other categories are clothing and footwear (9%), furnishing and household equipment (8%), recreation and culture (8%) and health (also 8%). Communication, education, alcoholic beverages, tobacco and other goods and services comprise the remaining 15% of the index.

Nations final annualized CPI, evaluated in accordance with the harmonized methodology, probably remained at 0.2% in October, matching the preliminary HICP estimate, which was released on October 31st. The National Institute of Statistics (Istat) is to release the official CPI report at 9:00 GMT.

In case the annualized CPI accelerated more than projected, the euro would receive a certain support.

ECB Monthly Bulletin

At 9:00 GMT the European Central Bank (ECB) will release its Monthly Bulletin, including detailed analysis of current and future economic conditions and price stability risks in the Euro region from bank’s perspective. It is usually published one week after ECB’s interest rate decision.

Yen performance

Bank of Japan policymakers introduced further stimulus measures at the end of October, which tend to devalue the national currency. Investors were also surprised by the pension reforms in the country that allow more money to flow abroad and to be invested into local stocks. The yen has lost ground against peers in the current week as speculation appeared Japans Prime Minister Abe would postpone an increase in the sales tax until October 2015, so that he could win a mandate for it at the polls, Bloomberg reported.

“The market has taken the idea of a delay in raising the sales tax as a positive, so stocks have been bought and dollar-yen has risen,” said Masato Yanagiya, head of foreign exchange and money trading at Sumitomo Mitsui Banking Corp. in New York, cited by the same media. “Once we get an actual announcement, there’s a good chance we’ll see a further reaction in the market.”

The euro has gained a bit more than 1% against the yen this week, while the US dollar advanced 1.16%. On November 11th USD/JPY reached highs unseen since October 2007 at 116.10.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 143.89. In case EUR/JPY manages to breach the first resistance level at 144.48, it will probably continue up to test 145.31. In case the second key resistance is broken, the pair will probably attempt to advance to 145.90.

If EUR/JPY manages to breach the first key support at 143.06, it will probably continue to slide and test 142.47. With this second key support broken, the movement to the downside will probably continue to 141.64.

The mid-Pivot levels for today are as follows: M1 – 142.06, M2 – 142.77, M3 – 143.48, M4 – 144.19, M5 – 144.90, M6 – 145.61.

In weekly terms, the central pivot point is at 142.41. The three key resistance levels are as follows: R1 – 144.47, R2 – 146.29, R3 – 148.35. The three key support levels are: S1 – 140.59, S2 – 138.53, S3 – 136.71.