FxWirePro: EUR/JPY rangebound above major trendline support at 129.65, focus on ECB policy meet

• EUR/JPY rangebound on the day as markets remain cautious ahead of ECB policy meeting.
   
• The pair is holding above major support in the 129.65 to 129.76 range. We see weakness only on break below.
   
• Markets are expecting the ECB Chief Draghi to refrain from EUR jawboning, and to leave the policy settings unchanged.
   
• The rhetoric to follow will be keenly watched and fresh hints on the QE tapering plans would be viewed as a major policy shift towards a hawkish narrative and push the EUR higher.
   
• Ahead of the ECB decision, the single currency will take some cues from the German industrial production and Eurozone final Q2 GDP revision.
   
• On the upside, decisive close above 5-DMA raises scope for test of 131.70 levels.

Support levels - 129.76 (20-DMA), 129.70 (50-DMA), 129.53 (cloud top)

Resistance levels - 130.18 (5-DMA), 130.40 (Aug 18 high), 130.77 (July 11 high), 131, 131.70 (Aug 30 high)

Recommendation: Focus on ECB for cues on further direction.

FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at 26.4046 (Neutral), while Hourly JPY Spot Index was at 10.616 (Neutral) at 0700 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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