EURJPY Bullish Pin Bar

Recent price action in EURJPY has caught my eye. The decline from May highs has seen the pair breaking down below the rising channel, trading as low as a test of the 128.43 level support. However, looking at the weekly close last week you can see that the sharp rebound over last week saw the market printing a bullish pin bar as of the Friday close. Given this development, and in consideration of the view shared in the EURUSD Market Spotlight, I will be monitoring this pair for a break higher. Above 130.96, bulls can target the 132.02 level initially and 133.13 thereafter.

Key Data to Watch

Eurozone CPI and JPY unemployment rate both later in the week will be the key domestic focuses for this pair. However, the greater focus is likely to be on the outcome of the July FOMC meeting as well as how risk flows develop over the week. If asset markets remain supported across the week and USD trades lower following the FOMC, on any dovish disappointment, this should pave the way for higher price sin EURJPY.