Euro bears are holding their ground against the yen ahead of the ECB’s policy announcement!
Think EUR/JPY will keep inside its range pattern in the next trading sessions?
Or is the pair ready for a breakout?
EUR/JPY 4-hour Forex Chart by TradingView
In a few days, European Central Bank (ECB) members are widely expected to cut their interest rates, dragging the bank’s deposit rate 25 bps lower to 3.25%.
But the Japanese yen isn’t doing too hot either, as it bows down to increased USD demand and an improvement in overall risk sentiment.
EUR/JPY is up by about 400 pips so far this month, thanks to ECB members coming out to support “gradualism” in cutting interest rates.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the euro and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Will this week’s themes extend EUR/JPY’s monthly gains?
Take note that that pair is trading in a range and that the 163.75 range resistance has been unbroken since August. Bearish candlesticks and sustained trading below the 162.85 Pivot Point line expose the pair to a possible move down to the 162.00 psychological level, 161.50 100 SMA levels, or the 160.00 mid-range area.
Of course, EUR/JPY may also extend its October uptrend.
Keep an eye out for bullish candlesticks above the rising trend line in the 4-hour time frame as it could lead to another retest and maybe even consistent trading above the R1 (163.80) Pivot Point line if not the 164.00 psychological level.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier market catalysts when trading this one. Good luck!
