The EUR/JPY pair is holding at the top, just below a tough resistance level of 126.800. It’s massively overbought as investors are looking for a fundamental reason to enter a sell position in this pair.

What can it be? I think German ZEW Sentiment can be a perfect fundamental to catch a movement in this pair. It can either drive a bullish breakout or can trigger a bearish sell-off depending on the nature of data release.

German ZEW Economic Sentiment which is expected to rise by 0.9 points and it’s due in 30 minutes at 9:00 GMT.

EUR/JPY is trading at 126.600, just below 126.80 resistance area. The leading oscillators including RSI and Stochastic are suggesting a bearish retracement in the pair.

Support Resistance
125.31 127.3
124.05 128.03
122.06 130.02
Key Trading Level: 126.04

On the lower side, EUR/JPY can complete 23.6% retracement at 126.26 and 50% around 125.90. With that, I will be looking to open a sell position below 126.750 with a stop loss above 126.850 and take profit at 125.800.

Good luck!