EUR/JPY has been quite corrective and slow with the recent bearish momentum while consolidating at the edge of 125.00 area. In light of upbeat economic reports from Japan, JPY is picking up steam versus EUR. EUR has been hurt by a slowdown in the eurozone's economic growth and the looming BREXIT.
The power engine of the eurozone's economy, Germany is currently losing momentum. The slowdown is making an impact on tax revenues in overall Europe. Besides, Germany is expected to face a budget shortfall in the coming years. Global trade tensions and concerns about Brexit is assumed as the catalyst to slash down the growth forecast from 1.8% to 1.0% which weakened the overall economic strength of the eurozone. The policymakers are currently back footed as ECB President Mario Draghi is leaving in October this year. As the eurozone economy is losing steam, the ECB's long-standing guidance for a rate hike this year is not expected to get delayed which may not occur this year as well.
Today German Factory Orders report is going to be published which is expected to increase to 0.3% from the previous value of -1.0%. Moreover, tomorrow German Industrial Production is expected to show a bounce to 0.8% from the previous drop of -1.9% and French Trade Balance is also expected to increase to -4.1B from the previous figure of -5.1B. Ahead of the ECB Economic Bulletin, such economic reports are going to provide the required direction for the pair's momentum, whereas positive readings may lead to further bullish pressure on the EUR gains.
On the other hand, JPY has been quite firm amid the recently published economic reports despite the fact that the recent wages' issues weakened the currency and questioned the economic growth. Tomorrow Japan's Leading Indicators report is going to be published which is expected to decrease to 97.9% from the previous value of 99.1% and on Friday Japan's Household Spending report is going to be published which is expected to increase to 0.8% from the previous value of -0.6%. Moreover, Bank Lending report is expected to be unchanged at 2.4% while Current Account is expected to increase to 1.52T from the previous figure of 1.44T.
Meanwhile, while EUR is struggling amid a slowdown in the eurozone's economy, JPY is expected to gain further in the coming days as the Bank of Japan keeps interest rates steady at a historical low and upcoming economic reports are likely to reveal positive figures.
Now let us look at the technical view. The price is currently residing at the edge of 125.00 area from where it is expected to push lower towards 123.50 support area. On the contrary, if the price remains above 125.00 area, certain bullish pressure can be also observed.
