EUR/JPY decreased a little today and continues to challenge a dynamic resistance. Price has broken above a dynamic resistance level, but is premature to say that we’ll have a valid breakout because the Yen received support from the Nikkei’s massive drop. The currency pair has increased somehow surprisingly and the JP225 index has started a corrective phase after the amazing upside momentum. EUR/JPY moves sideways and maintains a bullish perspective because is located above an important dynamic support.

Price is located in the buyer’s territory on the Daily chart, has failed to drop even if the Nikkei plunged in the last days, signaling that the bulls are very strong on the short term.

The Yen increased on the mixed Japanese data, the Revised Industrial Production dropped only by 1.0% in September, less compared to the 1.1% estimate and after the 1.1% drop in the former reading period. The Prelim GDP rose only by 0.3% in Q3, less compared to the 0.4% estimate, while the Prelim GDP Price Index surged by 0.1% in the third quarter, matching expectations.

On the other hand, the Euro has managed to pick up a little in the last hours as the Euro-zone Trade Balance increased more than expected, from 21.0B to 25.0B, exceeding the 21.2B.

The rate has found temporary resistance at the outside sliding line (SL) of the major red ascending pitchfork, we’ll see if will have enough directional energy to stabilize above it. Technically, it could climb much higher after the failure to reach and retest the upper median line (UML) of the major ascending pitchfork.

Price is narrowing on the short term, it could find strong resistance at the 150% Fibonacci line and higher at the median line (ml) of the blue ascending pitchfork. Price increased in the last days only because the Euro is very strong on the short term. EUR/JPY could move sideways in the upcoming period and could still retest the UML and the lower median line (lml) of the blue ascending pitchfork.