|

EUR/JPY ignores German Factory Orders, remains depressed near 156.00 amid downbeat yields

  • EUR/JPY stays pressured after two-day losing streak, lacks clear directions of late.
  • German Factory Orders post notable growth in June, crosses market forecasts and prior readings.
  • Pullback in global Treasury bond yields from multi-day peaks weigh on prices amid cautious optimism.
  • Looming divergence between ECB and BoJ monetary policy keeps sellers hopeful ahead of Eurozone Retail Sales.

EUR/JPY remains sidelined around 156.00 as it pays little heed to the German Factory Orders data amid early Friday morning in Europe. In doing so, the cross-currency pair struggles for clear directions amid downbeats yields and mixed concerns about the European Central Bank (ECB) and the Bank of Japan (BoJ).

Germany’s Factory Orders grew 3.0% YoY versus -4.4% prior while the monthly growth came out as 7.0% from 6.2% previous readings and -2.0% market forecasts.

That said, Thursday’s softer prints of the Eurozone Producer Price Index (PPI) for June, the lowest in three years, with -3.4% YoY figures versus -3.1% expected and -1.6% prior (revised), weighed on the EUR/JPY price the previous day. On the same line were the final readings of the bloc’s HCOB Composite PMI and Services PMI for July deteriorated while the same activity numbers for Germany improved from the initial forecasts for the said month.

Furthermore, the mixed comments from European Central Bank (ECB) board member Fabio Panetta also weighed on the pair as he supported high interest rates for a longer time via a webinar. The policymaker, however, also added, “Inflation risks are balanced and economic activity is weak.”

It should be noted that the Bank of Japan’s (BoJ) two unscheduled bond-buying programs and the decision-makers’ defense of the easy-money policy flags fears of the BoJ’s exit from the record low interest rate and/or a tweak to the Yield Curve Control (YCC) policy.

Elsewhere, top-tier Treasury bond yields retreat from the multi-month high marked the previous day and exert downside pressure on the EUR/JPY price, which in turn stops the quote from cheering the German data.

Looking forward, Eurozone Retail Sales for June, expected -1.7% YoY versus -2.9% prior, will be important to watch for intraday directions of the pair. Above all, the likely monetary policy divergence between the ECB and the BoJ keeps the EUR/JPY bears hopeful.

Technical analysis

Bullish megaphone trend-widening formation keeps EUR/JPY buyers hopeful despite the latest U-turn from the pattern’s top line, close to 157.60 at the latest. That said, the 50-DMA level of 154.50 can restrict the immediate downside of the pair ahead of directing it to the stated megaphone’s bottom line of around 152.70.

Additional important levels

Overview
Today last price156.03
Today Daily Change-0.04
Today Daily Change %-0.03%
Today daily open156.07
 
Trends
Daily SMA20155.79
Daily SMA50154.4
Daily SMA100150.42
Daily SMA200146.67
 
Levels
Previous Daily High157.24
Previous Daily Low155.53
Previous Weekly High157.8
Previous Weekly Low151.41
Previous Monthly High158.05
Previous Monthly Low151.41
Daily Fibonacci 38.2%156.18
Daily Fibonacci 61.8%156.59
Daily Pivot Point S1155.32
Daily Pivot Point S2154.58
Daily Pivot Point S3153.62
Daily Pivot Point R1157.03
Daily Pivot Point R2157.99
Daily Pivot Point R3158.73

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

More from Anil Panchal
Share:

Editor's Picks

AUD/USD hangs near three-week low, below 0.6950 as traders await US NFP report

AUD/USD hits a three-week low during the Asian session on Friday as the RBA’s dovish shift and a rout in equity markets weigh on the risk-sensitive Aussie. However, the recent slump in US bond yields to a two-month low keeps US Dollar bulls on the back foot and limits losses for the currency pair as traders look to the US NFP report for a fresh impetus.

USD/JPY bounces off three-week low; keeps the red near 157.65 as focus remains on US NFP

USD/JPY bounces off the weekly low set during the Asian session, as bears turn cautious ahead of the US NFP report due later this Friday. The upside seems limited as the recent slump in US bond yields and hopes of Iran war de-escalation undermine the US Dollar. Moreover, a hawkish BoJ and intervention risks support the Japanese Yen, capping the pair.

Gold loses the grip; $4,000 comes next on the downside

Gold sets aside two daily advances in a row on Friday, opening the door to a potential test of the key $4,000 mark per troy ounce. The precious metal’s retracement follows a decent improvement in the sentiment surrounding the US Dollar, solid NFP data and higher US Treasury yields across the board.

Democrats win House and Senate in US midterms: Why isn’t all bad news for crypto

The biggest story this week was Tuesday’s US midterm elections, which saw Democrats win control of both the House and the Senate in a clear blue wave. This political shift in the US has triggered sharp price swings across the cryptocurrency market.

Week ahead – Inflation and geopolitics in focus as US political landscape shifts

Post-midterm election euphoria fizzles out as risk aversion prevails. US CPI, PPI and Fedspeak on the radar as Fed hike bets remain supported. Oil retreat pauses on mixed hopes about the ongoing conflicts.

US Dollar breaks below 101.50 as Democrats sweep Congress
The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.