Market Review: EURJPY Weekly Outlook – MAY 6th – 10th

Expectations for the market were met by the ECB at the last policy meeting that was held on May 2, the minimum was cut by the Governing Council and the bid rate became 25bps to 0.50%. Something else that the board agreed to was extending the LTRO program.

The press conferences summary stated that a decline is expected by the bank and also the economic growth at this moment in time and so this will enable an easing which will be continuous and leave more room. One piece of news that turned out to be of major importance was that the ECB is now considering the deposit rates that are negative.

The President Draghi of the ECB said that the alternative is not attractive with the way things are in this current situation. What this means is that with the price being the way it is, it will not move at this moment in time.

Any data that is within the Eurozone over the last few months has been very disappointing even more so when it comes to the indices and from the economies that are the biggest but are still showing as in a recession territory that is very steep.

So what analysts are now looking for and will look out for is any comments that members of the Council make and a shift in monetary policy that will be happening in the future.

One good thing that has happened is that the unemployment rate in Japan has now dropped from 4.3% to 4.1% and this is due to household spending being on the increase. Bold polices have been implemented by BoJ’s Governor Kuroda and what they aim to do is help Japan’s already weakening Yen and help improve the economy.

Exports that are strong and with domestic spending being rejuvenated are also results that are improving not only the general public but also sentiment among them too, although there are critics who disagree with the large inflation target that has now been set by the Prime Minister Abe.

What all these facts point out is that a stimulus that is on going and programs on spending are getting results that are positive and it is now looking like the forecasts overall for the economy are going to be achievable.

The Current Account and Leading Indicators for this week will help a decision about the Yen and in which direction it will be going in.

Market Review: EURJPY Weekly Outlook – MAY 6th - 10th

Market Review: EURJPY Weekly Outlook – MAY 6th – 10th

Technical Analysis: A 4 hour chart that has had technical study has indicated that a correction is due for the EURJPY 125.10 from 130.10, and what is recommended is a short at the 100.0% fib level.

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