Fundamental Analysis of EURJPY for April 30, 2018

EUR/JPY is currently quite volatile and corrective, residing inside the price range of 131.50 to 133.00. The price has been struggling to break above the 133.00 area for a while now whereas EUR failed to gain momentum due to worse economic reports weakening the bullish pressure in the process. Today EUR German Retail Sales report was published with a decrease of 0.6% from the previous decline of -0.2% which was expected to increase to 0.8%; M3 Money Supply report showed decrease to 3.7% from the previous value of 4.2% which was expected to be at 4.1%; Private Loans report showed slight increase to 3.0% which was expected to be unchanged at 2.9%; and Italian Prelim CPI report was published with decrease to 0.1% from the previous value of 0.3% which was expected to be at 0.2%. Moreover, the German Prelim CPI and ECOFIN Meetings results is currently tentative and expected to be quite neutral with the outcomes.

On the JPY side, after having BOJ Policy Rate unchanged at -0.10% which was published last week along with BOJ Statement which had hawkish forecasts for the upcoming economic development of Japan. The positive economic event helped the currency to gain certain momentum over EUR but was not sufficient to counter with an impulsive pressure. Today, as of the observance of the Showa day, there will be no economic report or event on the JPY side, whereas tomorrow the JPY Final Manufacturing PMI report is going to be published which is expected to be unchanged at 53.3.

As of the current scenario, certain volatility and further correction along the way is expected, whereas JPY is expected to have an upper hand having mixed economic reports this week, while EUR is expected to struggle with the worse economic reports.

Now let us look at the technical view. The price is currently residing above the dynamic level of 20 EMA which is expected to push lower towards 131.50 and later towards 129.50 in the coming days. Recently in the market, the Bearish Continuation Divergence has formed which is expected to push the price lower in the coming days with confluence. As the price remains below the 133.00 area, the bearish bias is expected to continue further.