EURJPY right on major support, remain bullishBuy above 119.64. Stop loss at 119.16. Take profit at 120.66.
Reason for the trading strategy (technically):
We remain bullish above 119.64 support (Fibonacci retracement, Fibonacci extension, horizontal support). Target would be 120.66 resistance (Fibonacci retracement, horizontal pullback resistance).
Stochastic (21,5,3) is seeing strong support above the 6.4% level.
Reason for the trading strategy (fundamentally):
The main news event driving EUR today is the Euro-Zone Consumer Price Index (CPI) Estimate. The CPI is the key gauge for inflation in the Euro Zone. The index tracks changes in the price of a basket of goods and services that a typical household might purchase. When the CPI is high, it indicates that significant inflationary pressures exist in Euro Zone economies. This puts pressure on the European Central Bank to raise interest rates. When CPI comes out lower than expected the ECB is expected to lower interest rates, or keep them lower, to encourage economic growth. We are expecting a lower CPI which would mean a weaker EUR. This goes against our bullish EURJPY trade today so it is best to exercise caution on this trade.
