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12.02.201908:33 Forex Analysis & Reviews: Fundamental Analysis of EUR/JPY for February 12, 2019

Long-term review
This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

EUR/JPY is currently trading higher after breaking below 125.00 with a daily close recently. The price is expected to make a correctional decline along the way. The eurozone is facing a slowdown which has been proved by recent downbeat economic reports. This is certainly bearish for EUR.

Citing Finance Minister Mario Centeno, a slowdown in the eurozone's economy is caused by political risks which the EU policymakers should bear in mind. Most countries in the eurozone have reported evidence of a slowdown in their domestic economies that dents the overall growth in the eurozone. Another headwind is the looming divorce of the UK with the EU. Moreover, ECB Vice President Luis De Guindos recently stated that the inflation will rise on the back of higher wages and ultra-loose monetary policy. Today, German Buba President Weidmann is going to speak on the eurozone's key interest rates and future monetary policies. His speech is unlikely to provide EUR with support. In case the policymaker expresses hawkish rhetoric, certain bullish momentum is expected in the pair in the coming days.

On the JPY side, today M2 Money Stock report was published unchanged as expected at 2.4% whereas Tertiary Industry Activity showed a slight increase to -0.3% from the previous value of -0.4% which failed to meet the expected value of -0.1% and Prelim Machinery Tools Orders showed a slight decrease to -18.8% from the previous value of -18.3% which affected the overall JPY growth, leading to certain EUR gains for a while. At present, JPY is a firmer currency in the pair on the back of stronger Japan's economy, while a slowdown in the eurozone's economy is affecting EUR strength.

Now let us look at the technical view. The price has recently breached below 125.00 area and as well as the trendline support which is currently being retested. The price is currently expected to push lower towards 122.50 support area in the coming days as it remains below 126.00 area with a daily close.

SUPPORT: 122.50, 123.50

RESISTANCE: 125.00, 126.00

BIAS: BEARISH

MOMENTUM: VOLATILE

Exchange Rates 12.02.2019 analysis

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