Global macro overview for 07/07/2017:

European stock markets are lower on Friday, following the release of the ECB Meeting Minutes. The conclusions from the meeting pointed out, that policymakers discussed removing its "easing bias" at the June meeting, nevertheless at the end decided not to make such a move mainly because stronger economic conditions had not resulted in higher inflation. The ECB chief economist Peter Praet reiterated this statement at a conference in Paris on Thursday. Moreover, Praet said that Eurozone economic growth is accelerating, but indicated that the ECB still needs to provide a "steady hand" in order to encourage stubbornly low inflation levels to rise up to the ECB yearly projections.

As it is widely known, the ECB at the June meeting has removed an easing bias regarding interest rates, effectively stopping the rumors regarding the possibility of further rate cuts. However, ECB policymakers may now be cautious about any more signals of further tightening policy, in order to avoid another run on the Euro, such as last week's "Draghi rally" during the ECB forum in Portugal. The next ECB meeting is scheduled on July 20, and the market participants could see a usual rate statement, with the standard explanation, that the economy is headed in the right direction, but QE will remain in place until inflation levels move higher. Nevertheless, Draghi had surprised the markets by many times before, so the meeting could turn out to be important and violate market-mover.

Let's now take a look at the EUR/JPY technical picture at the H4 timeframe. The bulls have managed to break out above the intraday resistance at the level of 129.08 (now support) and are heading higher in overbought market conditions. There is a clear bearish divergence between the price and the momentum indicator on this timeframe, so the upward rally might be short lived and the corrective cycle might start any time now.