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1 Oct 2013
EUR/JPY rebounds strongly on poor German data
FXstreet.com (Athens) – The EUR/JPY has been steadily heading downwards since the release of Euro zone data, as it appears that a lack of credit growth in the Euro-Zone has become a drag.
EUR/JPY drops on weaker German, Italian data, soft EZ PMI
The pair is under heavy pressure since the data released a bit earlier, showed that the German labor market has started to deteriorate. Being more précised, German unemployment unexpectedly increased for a second month in September, in a sign of an uneven recovery in Europe’s largest economy. Apart from Germany, Italy also released worse than expected labor data, while regarding the whole Euro zone area, the labor data announced at a bit better rate than the expected one (12.0% versus estimated 12.1% and 12.0%, the prior one). Furthermore, the slowdown in euro zone economic activity as widely depicted by the slight retracement in individual Euro-Zone countries’ PMI figures, resurfaced the concerns that the lack of credit growth in the Euro-Zone has become a drag. Traders should bear in mind what Draghi had said almost two months earlier; the president of ECB had pointed out that “the decline in Euro zone excess reserves”. Therefore, we are probably ahead of another round of LTRO which in any case would be EUR-negative similar to December 2011 and February 2012.
Technical Outlook and Strategic Bias on EYR/JPY
Karen Jones, Head Technical Analyst at Commerzbank suggests that “EUR/JPY has seen a strong rebound from the 55 day ma at 131.35 and remains under pinned by the 130.57/30 3 month uptrend.The intraday charts are suggesting intraday rebounds will struggle around current levels for another slide lower, however are giving conflicting signals and it is not clear.”
EUR/JPY drops on weaker German, Italian data, soft EZ PMI
The pair is under heavy pressure since the data released a bit earlier, showed that the German labor market has started to deteriorate. Being more précised, German unemployment unexpectedly increased for a second month in September, in a sign of an uneven recovery in Europe’s largest economy. Apart from Germany, Italy also released worse than expected labor data, while regarding the whole Euro zone area, the labor data announced at a bit better rate than the expected one (12.0% versus estimated 12.1% and 12.0%, the prior one). Furthermore, the slowdown in euro zone economic activity as widely depicted by the slight retracement in individual Euro-Zone countries’ PMI figures, resurfaced the concerns that the lack of credit growth in the Euro-Zone has become a drag. Traders should bear in mind what Draghi had said almost two months earlier; the president of ECB had pointed out that “the decline in Euro zone excess reserves”. Therefore, we are probably ahead of another round of LTRO which in any case would be EUR-negative similar to December 2011 and February 2012.
Technical Outlook and Strategic Bias on EYR/JPY
Karen Jones, Head Technical Analyst at Commerzbank suggests that “EUR/JPY has seen a strong rebound from the 55 day ma at 131.35 and remains under pinned by the 130.57/30 3 month uptrend.The intraday charts are suggesting intraday rebounds will struggle around current levels for another slide lower, however are giving conflicting signals and it is not clear.”