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EUR/JPY Signal - German factory orders - 06 April 2017

Signal details
Entry Price: 
118.25
Close Price: 
117.93
Direction: 
High
Expiry Time: 
20:00 GMT
Result: 
OTM
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German statistics agency Destatis is expected to release the monthly factory orders numbers from the Eurozone's largest economy. Economists polled are forecasting a headline print of a 3.5% increase on a month over month basis. This would potentially reverse the 7.4% decline registered in January 2017. The declines in January mostly came from a slump in new orders from the Eurozone.

Domestic orders in Germany fell by 10.5% while foreign orders also declined 4.9% on top of the decline in new orders from the other Eurozone countries. The manufacturers of intermediate goods showed a decline in new orders by 4% compared to December 2016. Capital goods had also declined 9.9% on the month. The decline in January had reversed December's gains of 5.2% that was previously registered.

The euro could be seen coming under pressure today both from the German factory orders as well as the ECB meeting minutes that will be released later today. The single currency has been trading relatively flat, although against the Japanese yen, the euro has been trending weaker.

Markets have been moving in a risk-off sentiment lately especially as traders were seen scaling back their bullish bets which saw the yen strengthening rapidly. The gains in the yen came about as investors remain wary of the election promises made by Donald Trump which included cut backs on taxes and spending on infrastructure plans. Nearly three months into his tenure, Trump is yet to provide more details on these points.

EURJPY has been trending lower for the past three weeks, with the current price action turning bearish. Thus, for today's binary options signals, we recommend CALL options only above 118.25 for a 20:00 GMT expiry time.

EURJPY has established resistance at 118.10 through 118.00 levels which could see further upside if the resistance level is breached. Given the strong pace of declines, a move above 118.25 will signal a retracement to the upside which could result in a bullish close today.

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.