Fundamental View

Eurozone’s recent data suggest weakness in the upcoming days. German economic slowdown weighing on the Union, ECB’s stimulus more than justified. Last Thursday EU Markit preliminary PMI for April reports got sort. Business activity bounced from March’s collapse, but not enough. And ECB reconsider the need for more stimulus.

German ZEW survey showed that economic sentiment bounced in April, although the assessment of the current situation indicated that distrust persists.

The upcoming week has little to offer in terms of European data, with April Consumer Confidence to be out Tuesday, being the most crucial piece of data. Dull trading could persist in the first half of the week.

The Bank of Japan trimmed its routine purchases of long-dated bonds today, so far, the central bank’s move has not had any impact on the JPY. JPY is almost neutral because of US10 year’s bond. Even good US data didn’t impact on JPY. North Korea launched a new tactical guided weapons firing test on Wednesday. Even this news didn’t impact on JPY.

Thursday, market talks indicated that BOJ was likely to revise its inflation forecast, now seen below 2.0% until March 2022. Also, at the beginning of the day, Japan released the preliminary April Nikkei Manufacturing PMI resulted at 49.5, still in contraction territory but slightly better than the previous 49.2. Japan will release March National CPI early Friday, seen up by 0.5% YoY. So fundamentally JPY is neutral.

Technical view

125.46 is key support area. So market still got chance to test 126.30. if 126.30 breaks and stable next target 126.55, and final target to upside 126.78.

On the other hand if market breaks and stable bellow 125. 45 45 initial target 125.05, next target 124.80 and final target 124.35 area.  

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