EUR/JPY is the cross currency pair against the U.S. dollar. As you can see the U.S. dollar is not present in this currency pair, however it still considerably influences it. That is obvious when you combine two charts: EUR/USD and USD/JPY. By uniting them, you can get an approximate chart of the EUR/JPY pair.
Both currencies are under the significant impact of the U.S. dollar. Therefore, it is necessary to follow the main indicators of the U.S. economy to forecast correctly the future movement of this financial instrument. There are some indicators such as the interest rate, GDP, unemployment, new workplaces, and many others. It is important to consider that listed above currencies can react differently to the economic changes in the U.S.
When you predict the future EUR/JPY movement, you should take into account all the important changes in Japan and the EU economy. The official reports of the Japanese and EU’s governments can also provoke the movement of this currency pair, so you should observe them regularly.
The interest rate set by the Bank of Japan to control national economy is one of the most influential indicators of the Japanese economy. The manipulations with the state bonds also should be considered. Since Bank of Japan manages a lot of economic processes by buying and selling them, the government bonds, in their turn, have an effect on the value of the yen.
The main international political and economic events considerably influence the EUR/JPY. So the forecasting of this currency pair trend is rather problematic, because usually it is contrary to any analysis.
This currency pair is not recommended to beginning traders to start with. To work with this financial instrument it’s necessary to keep in mind lots of nuances that can have dramatic impact on the future price movement.
Furthermore, you should remember that broker’s spread for this currency pair is generally higher than for the popular ones. That’s why before you start dealing with the cross pairs, thoroughly study the broker’s conditions to trade with specified trade instrument.