EUR/JPY lacks momentum ahead of German factory orders
While the absence of major risk catalysts stopped EUR/JPY from declining further on the previous day, pair traders remain cautious ahead of German Factory Orders since the day started. The quote takes the round to 121.67 before the European markets open on Friday.
The US holiday tamed market activity on Thursday, giving less response to news headlines. Adding to the inaction was lack of data on the economic calendar.
In doing so, sluggish prints of the Eurozone Retail Sales were also largely ignored even if it raised prospects of additional dovish statements from the European Central Bank’s (ECB) July meeting.
Investors were also less fearful of China’s denial to follow latest trade truce terms unless the US lifts its ban of Huawei. Furthermore, lower than forecast 95.7 figure to 95.2 mark of Japan’s preliminary Leading Economic Index (May) couldn’t please momentum traders as well.
Moving on, Factory Orders from the EU bloc’s largest economy, Germany, will immediately preside on traders’ radar. The key data is expected to fall t a seasonally adjusted rate of 0.1% month-on-month in May versus a +0.1% increase in April. Further, the annualized figure suggests a 5.7% drop compared to 5.3% slide in the previous month.
Risk tone remained tilted to downside with the 10-year US government bond yield being at 1.946% and the German 10-year matching the European Central Bank (ECB) rate of -0.40 for the first time in history.
Following German data, how the US traders react to the latest market news, coupled with the June month employment statistics form the US, will be in the spotlight.
Unless breaking 122.16/18 resistance-confluence comprising 50% Fibonacci retracement of the late-June rise and 200-HMA, the pair isn’t expected to revisit 122.60 and 123.00 numbers to the north. As a result, sellers can keep an eye over recent low surrounding 121.37 that holds the key to the pair’s downpour to June 21 low near 120.95.