Good data from Germany hit the newswires.
The Ifo Business Climate index in Germany was better than expected as it was released at 117.6 points, which means that In January Ifo index increased from 117.2 points to 117.6 points The assessment of the current situation improved as well (127.7 points), but prospects for the future deteriorated a little(from 109.4 to 108.4 points).
The market participants await the event of the day which is the ECB interest rate decision and Mario Draghi's press conference. It can be understood that the markets will once again play the subject of the QE program ending in September, and possible interest rate hikes in 2019, but it is hard to imagine that the appreciation of the euro could take place at such a sudden pace as before. Today's "dovish" signals from the ECB, which for some will not be a surprise, may become a reason for correction of the euro rate. It is rather unlikely that the Bank has already decided to change its "language" in communication with the markets. Moreover, it looks like Mario Draghi will want to limit market speculation related to the possibility of interest rate hikes in the first quarter of 2019 and further euro appreciation. The ECB press conference after the rate decision will be the key event and should be in the center of attention for global investors today.
Let's now take a look at the EUR/JPY technical picture in the H4 timeframe. The market trades just above the technical support at the level of 134.97 and this long horizontal move might cause a breakout in either direction. Due to the weak momentum on somehow oversold market conditions, this consolidation might last for a while as there is no sign of hurry from the bull or bear camp so far. The congestion area is being maintained and the global investors should wait patiently for a decisive breakout.
