EUR/JPY broke recent swing highs, but are the bulls done there and ready to take profits or will the momentum higher continue?
Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a potential setup on AUD/USD as it tests the top of the range, so be sure to check that out to see if there is still a potential play!
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Fresh Market Headlines & Economic Data:
Upcoming Potential Catalysts on the Economic Calendar
Japan Retail Sales at 11:50 pm GMT
Australia Inflation Rate, Goods Trade Balance at 1:30 am GMT (Apr. 28)
Germany Consumer Confidence at 6:00 am GMT (Apr. 28)
France Consumer Confidence at 6:45 am GMT (Apr. 28)
What to Watch: EUR/JPY
After basing just under the 130.00 major psychological handle for a week, EUR/JPY bulls quickly took the pair higher in the last two sessions to break above the previous swing high at the 131.00 handle. Will this break draw in momentum players to chase the pair higher?
Well, we’ve got potential catalysts for the pair coming up in the form of Japanese retail sales data and consumer confidence data from both France and Germany. These aren’t likely to be big catalysts for either of the currencies, but it may be enough to keep the bullish party going that a dovish BOJ monetary policy statement started.
Expectations are for the Japanese retail sales data to improve, which could lead to a short-term pullback. And if that doesn’t do the trick, the pair may be overbought according to the stochastic indicator. That could lead to some selling on profit taking in the upcoming Asia and London trading sessions.
If we do get a pullback and risk sentiment stays relatively positive, that could be a buying opportunity. And if we don’t get absolutely terrible data from Europe later, technical traders could look to take the pair higher if we see bullish reversal patterns on after a pullback around the broken swing highs area.