EURJPY, H1 & H4
The EUR has been this morning’s best performer, with the JPY the weakest, as many forex pairs remain in tight ranges ahead of a very significant weak for data and policy. The German state inflation data so far today leaves downside risk to July HICP. German state CPI inflation showed steady or lower headline rates in 6 states, with only Saxony reporting a slight acceleration in the annual rate. This leaves a downside risk for the pan German HICP rate, which is due to be released at 12:00 GMT and is expected to come in at 2.1%. Even if the German rate falls back to 2.0% , it would remain at the upper end of the ECB’s definition of price stability and would not change the policy outlook.
The EUR crosses have all caught a new week / end of month bid. EURUSD rallied through the R1 and 200 moving average resistance zone at 1.1675 to touch 1.1691 and R2, EURGBP ran to a three day high north of 0.8900 at 0.8906 but the best performer has been EURJPY. The rally in the EURJPY to over 129.80 (H4 200 moving average) from Friday’s low at 129.12 has moved the oscillators close to overbought. However, a beach and break of 129.85 could see a re-test of 130.00 and last week’s high of 130.25, the support zone sits around 129.60 and the daily pivot at 129.35.
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Stuart Cowell
Head Market Analyst
HotForex
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