The EURJPY pair previously broke out from a continuation inverted head and shoulders pattern. This occurred when the euro surged against the Japanese yen to bring the pair over its resistance at 132.00. Following the breakout, the pair rose to a high of around 132.70. Since reaching the mentioned high, the pair has weakened and has revisited the pattern’s former neckline. If the 132.00 support holds then the EUR/JPY pair may rise back to at least 132.50 or even to its upside target of 133.00. On the other hand, a fall below 132.00 may send it down to at least 131.50.
Fundamentally, the German Ifo Business climate index will be released this afternoon. The index is seen to marginally rise to 106.30 from 105.90 but with the better-than-expected PMI figures from France and Germany yesterday, there’s a good chance that the German Ifo would also print a higher than estimate figure. A better-than-expected number would benefit the euro while the opposite would dampen it.
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