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The ECB decision is coming up!

If policymakers make big announcements, could this euro pair be in for a wild ride today?

Before moving on, ICYMI, today’s Asia-London session watchlist checked out a potential momentum move on EUR/AUD ahead of the ECB decision. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

  • ECB monetary policy decision at 11:45 am GMT
  • ECB press conference at 12:30 pm GMT
  • EIA crude oil inventories at 3:00 pm GMT
  • BOC Governor Macklem’s speech at 4:00 pm GMT

If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.

What to Watch: EUR/JPY

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

Heads up for a potential reversal!

This pair made a couple of failed attempts to break above the 130.75 level, creating a double top pattern on its short-term chart.

Will the ECB decision spur a strong selloff?

Analysts expect the central bank to share more deets on its taper plans, especially since the PEPP is due to expire early next year. Many are also hoping to get more clues on how the ECB will transition to its regular QE program afterwards.

However, refraining to give a timeline on reducing stimulus could be a huge disappointment for euro bulls, even if the staff upgrades economic forecasts.

ECB head Lagarde and her fellow policymakers could opt to defer any announcements until their December decision, possibly citing that there are still plenty of uncertainties.

EUR/JPY is already sitting right on the neckline around 130.20, and a break lower could trigger a drop that’s at least the same height as the reversal formation.

If support holds, on the other hand, the pair could bounce back up to the highs and beyond.

In any case, be on the lookout for jumpy price action during the actual decision and presser. Don’t forget to check out the average EUR/JPY volatility as a guide for setting entries and exits!