The EUR/JPY is trading in the green right now and seems poised to reach new higher as the Yen is weakened by the Nikkei’s impressive rally. Price is moving upwards within an ascending channel, is located near the half of this pattern and is expected to resume the bullish candle after the failure to reach and retest a support level. The Euro drags the rate higher even if the Japanese data have come in mixed today. Technically maintains a bullish bias on the Daily chart after a false breakdown.

Is very important to see what will happen on the Nikkie in the upcoming period, a further increase will send the Yen tumbling versus all its rivals.

I’ve added the JP225 daily chart to show you better why the Yen is going down so quickly. You can see that has found strong support at the red uptrend line and now is approaching the confluence area formed at the intersection between the upper median line (uml) with the WL1. The retest of the red uptrend line is signaling that we may have another leg higher in the upcoming period.

However, the rate is approaching the 19700 major static resistance as well, you can see that has rejected the price in the last two breakout attempts. Only a valid breakout above the mentioned static resistance and outside the descending pitchfork’s body will signal an increase at least till the 20058 horizontal obstacle.

The rate has failed to retest the inside sliding line (SL) of the major ascending pitchfork and now tries to close above the upper median line (UML) of the major ascending pitchfork. Only a retest of the upper median line (UML) will bring us a good buying opportunity on the short term.

The next upside target will be at the outside sliding line (ascending dotted line). You can see that is trapped within the sliding parallel lines, so only a valid breakout from this pattern will bring us a great trading opportunity.