EUR/JPY has been making higher highs and higher lows since finding support from the 157.00 psychological handle.
Can the pair extend its uptrend with today’s potential catalysts?
We’re taking a closer look at the 15-minute chart:
EUR/JPY 15-Minute Forex Chart by TV
If you’ve been looking at EUR/JPY’s short-term charts, then you’ll know that the pair has been trading in an uptrend since late last week when European Central Bank (ECB) President Lagarde kept the door open for further rate hikes in her Jackson Hole speech.
This week’s reports from the region are mostly supporting the ECB’s hawkish bias. Spain’s inflation printed higher than expected in August. Ditto for France’s CPI, which gained 1.0% m/m in August after a 0.1% uptick in July. Meanwhile. Germany’s CPI maintained its 0.3% monthly uptick despite another ECB rate hike.
Will expectations of further rate ECB rate hikes help extend EUR/JPY’s uptrend today?
In a few hours, we’ll see the Eurozone’s core CPI while the ECB will release its meeting minutes and the EU will publish its latest economic forecasts.
We also can’t ignore that Uncle Sam will print a bunch of closely watched reports like the core PCE price index – the Fed’s preferred inflation gauge – and the initial jobless claims data.
According to Pippo’s Event Guide, markets are expecting slightly higher (read: hawkish) numbers from the report. That may boost USD and inspire gains for USD/JPY!
If today’s Eurozone releases support further ECB rate hikes, or if the potential USD/JPY strength takes other yen crosses with it, then EUR/JPY may extend its uptrend.
For now, EUR bulls can consider the 159.00 – 159.30 area for long entry opportunities. As you can see, they line up with not only the Fibonacci retracement levels but also the trendline AND the 100 and 200 SMAs in the 15-minute time frame.
The 159.80 previous high makes for a good initial target but you can also target the big 160.00 if we see pro-EUR, anti-JPY trends in the next trading sessions.
What do you think? How high can EUR/JPY fly before the week ends?
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