The single currency was quickly erasing yesterday’s losses and the EURJPY cross was trading 0.60% stronger on Wednesday, hovering around 126.30 in the morning.
Earlier in the day, German retail sales surprised on the upside rising 1.2% m/m while increasing 2.3% y/y in April in real terms ahead of German inflation and unemployment data due later on Wednesday. Traders will also focus on Thursday’s euro zone CPI data and inflation is expected to accelerate from 1.2% to 1.6%, which could be a bullish signal for the single currency.
Later in the day, the US ADP employment report is due and should show 190,000 new jobs in May, down from 204,000 in April. Furthermore, the first revision of the US GDP for the first quarter will be released, along with the GDP price index.
Tuesday’s Italian problems seem to be gone, judging form the current market reaction. The resistance for the EURJPY cross is at 127.00 and afterward at 127.50. As long as the cross trades below, the outlook remains bearish. The euro is oversold and therefore some short squeeze rallies could occur. The support is at 126 and if not held, the price might revisit yesterday’s lows around 124.60. In all cases we strongly recommend to have rigorous money and risk management.
Disclaimer: The content of the Reports constitutes Marketing Communication and does not constitute Investment Advice or Investment Research or an offer for any transactions in financial instrument. The content of the Reports represents the view of our experts on a generic basis, and does not take into consideration individual readers personal circumstances, investment experience or current financial situation. In addition, the Reports have not been prepared in accordance with legal requirements designed to promote the independence of Investment Research, and are not subject to any prohibition on dealing ahead of the dissemination of Investment Research. Readers using the Reports should consider the possibility of encountering substantial losses. The past performance is not a guarantee of future results. Therefore, Goldenburg Group Limited shall not accept any responsibility for any losses of traders due to the use and the content of its Reports.