This EUR pair is at the top of its range on the four-hour time frame, and is still deciding whether to bounce or break.
Check out these inflection points on my radar!
EUR/JPY for 4 hours Chart by TradingView
After rallying early this month, the EUR/JPY pair is stuck in a consolidation zone just below the 163.50 minor psychological level.
As it turns out, this is the top of a long-term range that has been holding since mid-September. So will you continue to keep the gains under control?
Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven’t done your homework on the EUR and JPY yet, it’s time to check the economic calendar and stay up to date with daily essential news!
Just last week, the European Central Bank (ECB) announced its decision to cut borrowing costs by 0.25% while giving a slightly pessimistic forecast for economic performance.
Preliminary PMI readings in the region this week may confirm whether or not there is further policy easing, which could point Euro pairs in a clearer direction.
The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside, but watch for a break below the fast-moving SMA near S1 (161.70) to gauge if bearish sentiment is building.
If so, EUR/JPY could set its sights on the next downside targets at S3 (159.95) near a key psychological mark or S5 (158.05) near the October lows.
On the other hand, a break above the top of the range at R1 (163.45) could trigger a move towards the next upside target at R2 (164.40) or higher, so better stay alert!
Don’t forget to keep an eye on this week’s lineup of high-profile news events, as well as any headlines that could impact market sentiment, when making any trades.