Forex Market: EUR/JPY daily trading forecast

Yesterday’s trade saw EUR/JPY within the range of 133.99-135.34. The daily high has also been the highest level since February 4th, when a high of 135.41 was recorded. The pair closed at 135.21, gaining 0.64% on a daily basis.

At 8:08 GMT today EUR/JPY was up 0.29% for the day to trade at 135.59. The pair touched a daily high at 135.66 at 8:02 GMT.

Fundamentals

Greek bridge plan

Greece is seeking support for a bridge plan at the amount of EUR 10 billion. The countrys Finance Minister Yanis Varoufakis will ask for additional 8 billion euros in the stock of Treasury Bills Greece is allowed, according to a government official who asked not to be identified, because the negotiations are confidential.

“The bridge must be built by fiscal policy because it’s forbidden for monetary policy to finance states,” the president of German Bundesbank, Jens Weidmann, said in Istanbul in e-mailed response to questions on Tuesday, cited by Bloomberg. “The question of a bridge loan via T-bills has as a precondition, in my view, that it’s not a bridge to nowhere.”

At the same time, Germanys Chancellor Angela Merkel said in Washington on Monday that Greek talks should be based on the existing aid programs. “I’m waiting for Greece to come forward with a viable recommendation and then we’ll talk about it”, Angela Merkel noted.

The Eurogroup is to hold an emergency meeting today.

Japan

Machinery Orders

Machinery Orders in Japan probably increased 2.4% in December compared to a month ago, according to market expectations, after in November compared to October the indicator rose 1.3%. In annual terms, new orders, placed at major manufacturers in Japan, probably increased 5.9% in December, following a 14.6% drop in November. The latter has been the largest annual decrease in more than three years.

Machinery orders are considered as an excellent leading indicator, providing clues over business capital spending in Japan. An increase in new orders suggests that business confidence has gained strength, which can also trigger higher expectations over the nations economic growth. Therefore, in case new orders increased at a faster-than-anticipated pace, this would provide support to the Japanese yen. Japans Cabinet Office will release the official report at 23:50 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 134.85. In case EUR/JPY manages to breach the first resistance level at 135.70, it will probably continue up to test 136.20. In case the second key resistance is broken, the pair will probably attempt to advance to 137.05.

If EUR/JPY manages to breach the first key support at 134.35, it will probably continue to slide and test 133.50. With this second key support broken, the movement to the downside will probably continue to 133.00.

The mid-Pivot levels for Monday are as follows: M1 – 133.25, M2 – 133.93, M3 – 134.60, M4 – 135.28, M5 – 135.95, M6 – 136.63.

In weekly terms, the central pivot point is at 134.00. The three key resistance levels are as follows: R1 – 136.04, R2 – 137.46, R3 – 139.50. The three key support levels are: S1 – 132.58, S2 – 130.54, S3 – 129.12.