EUR/JPY Eyes Upside Break, ECB Next

Key Highlights

• EUR/JPY is forming a base above the 127.50 support zone.
• A major bearish trend line is forming with resistance near 128.60 on the 4-hours chart.
• EUR/USD is struggling to recover above the 1.1320 resistance zone.
• Gold price is slowly moving lower, and it could break the $1,750 support.

EUR/JPY Technical Analysis

The Euro tumbled from well above the 130.00 level against the Japanese Yen. EUR/JPY traded below 128.80 and even tested the 127.50 support zone.

Looking at the 4-hours chart, the pair seems to be forming a base above the 127.50 level. Recently, there was an upside correction above the 128.00 level. There was also a move above the 128.50 level and the 100 simple moving average (red, 4-hours).

However, the pair struggled to clear the 129.10 level. There was a fresh decline below the 128.50 and a low is formed near 127.81. The pair is consolidating and facing resistance near 128.50.

There is also a major bearish trend line forming with resistance near 128.60 on the same chart. The next key resistance is near the 129.00 level. A clear break above the 128.80 and 129.00 resistance levels could open the doors for a steady upward move.

If not, there could be a fresh decline below the 127.80 support. The next major support is near the 127.50 level, below which the pair could decline heavily.

Looking at EUR/USD, the pair is still well below the 1.1350 level and there is a risk of more losses below the 1.1200 support zone in the near term.

Economic Releases

• Germany’s Manufacturing PMI for Dec 2021 (Preliminary) – Forecast 56.8, versus 57.4 previous.
• Germany’s Services PMI for Dec 2021 (Preliminary) – Forecast 51.0, versus 52.7 previous.
• Euro Zone Manufacturing PMI for Dec 2021 (Preliminary) – Forecast 57.8, versus 58.4 previous.
• Euro Zone Services PMI for Dec 2021 (Preliminary) – Forecast 54.1, versus 55.9 previous.
• UK Manufacturing PMI for Dec 2021 (Preliminary) – Forecast 57.6, versus 58.5 previous.
• UK Services PMI for Dec 2021 (Preliminary) – Forecast 57.0, versus 58.5 previous.
• BoE Interest Rate Decision – Forecast 0.1%, versus 0.1% previous.
• ECB Interest Rate Decision – Forecast 0%, versus 0% previous.
• US Manufacturing PMI for Dec 2021 (Preliminary) – Forecast 58.5, versus 58.3 previous.
• US Services PMI for Dec 2021 (Preliminary) – Forecast 58.7, versus 58.0 previous.
• US Initial Jobless Claims – Forecast 195K, versus 184K previous.