And so far that is keeping a lid on the pair's upside move on the day. The euro is the strongest performing major currency as it stays bid against the dollar and the yen. In EUR/USD, the pair continues to hit the ceiling in an attempt to move above the 200-hour MA and resistance around 1.1650. As for EUR/JPY, the pair is now knocking on the door of breaking above the 100-hour MA (red line) @ 129.09.
For sellers, it is key to hold below the level as it would retain the near-term bearish bias in the pair. But the double-bottom pattern on the hourly chart is suggestive that buyers are poised to try and push price higher.
Looking at the bigger picture, there is daily support at 128.61 and from 128.50 and those levels are what is helping to keep the euro supported against the yen on the day. With a hint of a double-bottom pattern on the hourly chart, it is suggestive of a bounce higher but buyers need to be wary of the risk events ahead on the day.
The most important one of note will be the possible announcement of tariffs from the US on Chinese goods. That will heavily skew sentiment to favour the yen as markets turn risk off. The other notable event is also related to the yen and that is if there is any follow through on the report overnight that Trump may be targeting Japan next in the trade rhetoric. Further reports to surface there will also help stimulate bids in the yen.
But should there not be any trade-related headlines to make the news, then the pair looks set for a bounce higher but key resistance levels do lurk nearby so buyers will have to be aware of that. There's the 100-day MA @ 129.36 followed by the 200-hour MA @ 129.44. Following that is the swing region resistance around 129.85 and the 130.00 handle.
However, first thing's first. The 100-hour MA needs to be give way for those to even be considered. As price leans on the key levels above, it also makes for an attractive selling proposition as risk can be defined and limited by those levels above. So, pick your poison on whether the yen will fall or move higher. Or better yet, pick your poison on whether or not we'll get any trade headlines later today. It's pretty much the same thing here.
But if you're unsure and the risk is unsuited to your liking, stay away. There's always going to be another trade in the market. Always remember that.