In less than 30 mintes, the European Central Bank will be releasing its interest rate decision which is likely to be dovish in nature. ECB is expected to diminish its deposit rate from -0.4% — already a record low — to -0.5% crossed above the 50% threshold for the first time. As per the Bloomberg figures, ECB threshold was about 25% a month ago, and less than 10% at the start of June.

Swiftly moving to EUR/JPY chart, the pair is following a tight trading range of 120.550 to 120.200. In case the ECB decides to cut rates, we may see a sharp drop in EUR/JPY cross, and it may head lower to target 120 and even 119.600 today.

Support Resistance
120.28 120.67
120.05 120.83
119.66 121.22
Key Trading Level: 120.44

Whereas, the decision to keep rates unchanged may trigger buying in EUR/JPY above 120.300. The idea will be to capture an initial spike with a target of 120.500 and 120.700 today.

Good luck!