Harmonic Pattern Driving Bulls In EUR/JPY – Awaiting European Inflation

During the Asian session, the Japanese Yen strengthened after the Bank of Japan reported a hike in Japanese Inflation by 0.8% versus the 0.6% forecast. The impact of the inflation is over as investors are waiting for Fed Chair Powel and the European inflation figures. 

Fundamental Overview

Final CPI Y/Y – A few minutes before, the Spanish inflation figures released better numbers than the forecast, causing a sharp bullish wave in the EUR/JPY from 131.750 to 132.150. It’s also expected to beat the previous inflation growth rate by 0.5%, pushing another set of bulls into the market. The German Prelim CPI is yet to come.

EUR/JPY – Bullish Harmonic Pattern

Besides for the fundamentals, the technical side of the market is also supporting the bullish biased investors. For instance, look at the daily chart. The cross pair has completed a harmonic pattern at 131.100, signifying the pair is likely to remain bullish above this level.

EUR/JPY – Daily Chart

The 20 & 50 periods EMA are far behind the current market price. Although these represent a bearish sentiment of investors, there is room for a retracement.  

EUR/JPY – Trading Plan

Stay bullish above 131.75 with a stop below 131 and profit at 133.

Good luck!