EUR/JPY creates doji candle ahead of ECB speak
|- The doji candle indicates indecision in the marketplace.
- Hawkish comments from the ECB's Hansson could boost demand for the EUR.
The EUR/JPY created a doji candle on Monday above 132.24 (38.2 percent Fibonacci retracement of the Feb-March sell-off), signaling indecision in the marketplace (bullish exhaustion) following a360 pip rally from the March 23 low of 128.94.
Focus on ECB's Hansson speech
"Euro bulls look forward to an appearance by ECB's Hansson on Wednesday", according to Reuters. Hansson recently stressed the need to move very gradually with normalization but added the central bank risks falling behind the curve and may have to play catch-up if it waits too long to remove the stimulus.
The EUR may pick up a bid if Hansson sounds hawkish. On the other hand, dovish comments could yield a close below 132.12, confirming a bearish doji reversal (the rally from 128.94 has ended).
As for today, the EUR/JPY cross could be influenced by German Zew survey numbers (due at 09:00 GMT).
EUR/JPY Technical Levels
A move above 132.97 (previous day's high) would open the doors to 133.25 (50% Fib R of Feb-Mar sell-off) and 133.65 (Feb. 12 high). On the downside, breach of support at 132.21 (200-day MA + 23.6% Fib R of Feb-Mar sell-off) could yield a deeper pullback to 131.96 (10-day MA) and 131.55 (50-day MA).
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