24.01.201803:53 Forex Analysis & Reviews: Investors believe in the economy of Germany and the eurozone

Despite good fundamental data that emerged today in the first half of the day on the economy of Germany and the euro area, the European currency is in no hurry to strengthen its positions against the US dollar and a number of other world currencies. This indicates a restrained propensity of investors for risky assets on the eve of the meeting of the European Central Bank. The results of the anticipated meeting will be announced this Thursday, January 25. At the same time, there will be a press conference by ECB President Mario Draghi.

According to the report of the German Research Institute ZEW in January of this year, the mood in the German economy has improved once again as short-term growth prospects remain very good and the problems with the formation of the ruling coalition are coming to an end.

So, the index of economic expectations in January 2018 increased by 3 points to 20.4 points while economists expected that the index will be at 17.5 points. Most investors gave an optimistic assessment of the current economic conditions in Germany.

The index of sentiment in the business environment of the euro area, which was also published today, showed significant growth in January.

According to a report by the ZEW Institute, the index rose to a level of 31.8 points in January after dropping to 29 points in December 2017. Economists had expected the index to be at the level of 29.7 points.

Despite all this data, the EURUSD pair remained trading in its lateral channel. Technical prospects remain the same. Trade continues in the side channel, the lower border of which is located in the area of 1.2210 and the upper one passes in the area of 1.2295. The breakthrough of this channel in either side will lead to the formation of a more trendy, purposeful movement. The break at the range of 1.2295 opens up good prospects for the update of 1.2350 and 1.2390.

The Japanese yen continued to strengthen its positions, even despite statements made by the Bank of Japan Governor. Today it became known that the Bank of Japan kept the interest rate unchanged at a negative level of -0.10%.

The manager of the Bank of Japan, Kuroda, said that the price growth still lacks momentum and they remain low relative to the strength of the economy so that monetary policy will remain soft until inflation accelerates to 2%.

Kuroda also noted that there is still no need to consider stopping purchases of ETFs and also to revise the target level of profitability, as inflation expectations increase.