EUR/JPY rallied and managed to hit fresh new highs, is trading much above the 130.76 previous high. Is strongly bullish on the Daily chart, so it should reach new upside targets.

The Japanese currency dropped again versus all its rivals as the JP225 index has increased and erased the last two day’s losses. Nikkei is pressuring the 20058 major horizontal obstacle again, a rejection will force the Yen to increase again on the short term, but a valid breakout above this obstacle will signal a Yen’s decrease.

JP225 opened with a gap up in the morning, signaling that the bulls are present in the game, the index is narrowing, so we have to be patient to see the direction. A further Nikkei’s increase will be confirmed if will close above the 20320 previous high. The index has developed a minor symmetrical triangle, so a breakout will bring us a clear direction.

The Japanese Monetary Base was reported at 15.6%, less versus the 16.6% estimate and versus the 17.0% in the former reading period, while the Consumer Confidence increased from 43.3 to 43.8 points. Euro stays higher even if the Euro-zone data have come in worse.

Price rallied after the failure to retest the upper median line (UML) of the major ascending pitchfork and the red uptrend line. The next upside target will be at the 150% Fibonacci line (ascending dotted line), will approach and will reach this line only if the Nikkei will have enough energy to stabilize above the 20058 level.

You can see that I’ve drawn a potential Rising Wedge pattern, but a breakout above the upside line of this pattern will invalidate it. We may have a correction only if the chart pattern will be confirmed, this scenario could take shape only if the rate will fail to close above the 131.39 today’s high. Technically, the perspective is bullish, only a Nikkei’s sharply drop will force the currency pair to turn to the downside again. Right now we don’t have any reversal sign, despite a bearish divergence.