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There are a few medium-tier reports on the euro zone’s docket this session, so I’m hoping for a bit more action on this euro pair.

Here’s how the majors fared and a quick rundown of the big headlines in the last few of hours:

Currency Snapshot

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

  • German GfK consumer climate index at 7:00 am GMT
  • Swiss trade balance at 7:00 am GMT
  • ECB Financial Stability Report at 2:00 pm GMT

What to Watch: EUR/JPY

EUR/JPY 1-hour Forex Chart
EUR/JPY 1-hour Forex Chart

EUR/JPY has formed higher lows to cruise above a rising trend line on its 1-hour time frame, and the pair looks ready for another test of support.

Using the handy-dandy Fib retracement tool shows that the 61.8% level is closest to the trend line but that the 50% Fib already seems to be attracting buyers.

If bullish pressure keeps up, the pair could rebound to the swing high at the 118.50 minor psychological mark. A larger correction could see a dip to the 200 SMA dynamic inflection point, which is still within the area of interest.

The 100 SMA is above the 200 SMA to confirm that support is more likely to hold than to break, but stochastic is pointing down to suggest that sellers might still have some energy left.

Upcoming data from Germany could show a slight improvement in consumer confidence while the ECB Financial Stability Review could provide some assurance that the region could weather headwinds.

Earlier on, Japan reported weaker than expected results for the BOJ core CPI and all industries activity index, which puts downside pressure on the yen.

If you’re hopping in a long position on this one, just make sure you check the average EUR/JPY volatility when setting stops and targets!