On Wednesday, the single currency Euro seems to struggle ahead of ECB monetary policy decision which is due to come out on Thursday.

Ahead of the news release, Eurozone bond yields surged to their highest since the beginning of August on Wednesday because of uncertainties over whether the European Central Bank will publish a new round of asset purchases this week or will keep things as it is.

The ECB may reintroduce quantitative easing and bind it to future economic events as a basis for the fresh selloff in securities markets. That’s what most of the central bankers do lately.

Still, the ECB is broadly anticipated to diminish interest rates at Thursday’s policy meeting, uncertainties over whether a new round of quantitative easing will occur or not is causing intense bearish pressure on EUR/JPY.

Technically, EUR/JPY is holding at 118.700 area as the bullish channel is supporting the pair.

RSI and Stochastics were trading in the bullish zone, but now they seem to come out of the overbought territory, signaling strong chances of a bearish reversal.

The safe-haven cross EUR/JPY may find support around 118.450 and 118.200 while resistance is likely to stay around 119 and 119.250.

Support Resistance
118.44 118.99
118.08 119.17
117.54 119.72
Key Trading Level: 118.63

EUR/JPY – Trading Idea

Fellas, consider staying bullish or bearish below 118.63 area to target quick 30 pips on both sides. It looks like our forex trading signal on EUR/JPY is likely to hit stop loss, anyway, so it’s better to cut partial positions and wait for the market’s reaction.

Good luck!