Price rallied and extended the upside momentum as the Nikkei stock index has punished the Yen. The JP225 index has managed to jump much above 20132 yesterday’s high and seems poised to climb much higher. The Nikkei was almost to reach the 20320 highest high, but has found temporary resistance at the 20308 level.

A further Nikkei’s increase will force the Yen to drop much deeper versus its rivals in the upcoming period. Remains to see what will really happen because the index could decrease a little to retest the 20058 broken resistance.

EUR/JPY is strongly bullish on the short term and is expected to climb towards new peaks after the breakout from a minor ascending channel. Right now is pressuring an important dynamic resistance, only a false breakout will send the rate down again on the short term.

The Euro received support from the Euro-zone data, the Current Account increased from 22.8B to 25.1B in July, beating the 22.3B estimate, while the German ZEW Economic Sentiment increased from 10.0 points to 17.0 points, exceeding the 12.3 estimate. The ZEW Economic Sentiment disappointed, has increased from 29.3 to 31.7 points, but failed to reach the 32.4 estimate. The Yen could post some gains in the morning as the Japanese Trade Balance will be released.

Price has rallied after the breakout above the outside sliding line (SL) and now is located above the 150% Fibnacci line. It was almost to reach the red uptrend line, but was paused by the 134.16 level. Remains to see if this will be a valid breakout or the rate will fail to stay above the mentioned dynamic resistance.

A minor retreat will come if the Nikkei stock index will slip lower on the short term. EUR/JPY could come down to retest the broken outside sliding line before will climb much higher. However, a valid breakout above the 150% line will confirm an increase towards the first warning line (WL1) of the major ascending pitchfork.