EUR/JPY is pressuring a very strong dynamic support and the participants seem undecided after a false breakout above a dynamic resistance. Price continues to move sideways on the Daily chart, so we’ll have a clear direction only after a valid breakout from this extended range.

The rate has failed to make new highs, so it could drop again in the upcoming period if the Nikkei stock index will drop as well. I’ve told you in the previous reports on the Yen that the JP225 index is expected to drop and to force the Yen to increase versus all its rivals.

The Japanese data have come in mixed today and the only support for the Yen has come from the Household Spending, which it has increased by 0.1%, even if the specialists have expected to see a 0.9% drop. The Average Cash Earnings increased only by 1.5%, versus the 2.4% estimate, while the Leading Indicators was reported at 103.5%.

The Euro-zone Revised GDP increased by 0.4%, matching expectations, but it wasn’t enough to save the Euro from the downside.

The JP225 index is pressuring a dynamic support, so a valid breakdown will open the door for more declines, which will strengthen the Yen.

EUR/JPY is challenging the median line (ML) of the ascending pitchfork after the false breakout above the median line (ml) of the minor ascending pitchfork. A valid breakdown below the ML will confirm a drop towards the downside 50% Fibonacci line of the ascending pitchfork and towards the lower median line (LML, lml).

The failure to approach and reach the upside 50% Fibonacci line of the minor ascending pitchfork has signaled an exhaustion, so the rate could drop in the upcoming period. This scenario will take shape also if the Nikkei will continue to drop.

It could only increase if the JP225 will start another upside movement and if the pair will jump ad stabilize again somewhere above the 130.000 psychological level.