The currency pair dropped further today and touched new lows. It has dropped as much as 131.74 level, but failed to stay there and now is trading above the 132.3o level. EUR/JPY is into a corrective phase on the short term, but this could end up as the Nikkei stock index could jump much higher again. Price has squeezed in the last hours because the JP225 has managed to increase and to stay above the 20320 static support (resistance turned into support).
The Nikkie consolidates the latest gains and should resume the upside movement. Technically, it is expected to climb towards new peaks after the breakout above the 20320 previous high. I’ve said in the last articles that it could come down the 20058 horizontal support, but could increase further if the USDX will increase as well.
Price has dropped significantly since Friday and ignored the support from the median line (ml) of the black ascending pitchfork. Now is pressuring the sliding parallel line (sl) of the major red ascending pitchfork. A valid breakdown will confirm a further drop towards the upper median line (UML) of the major red ascending pitchfork. I’ve drawn a Rising Wedge pattern on the daily chart, but this needs confirmation before we take action.
However, it could find support at the downside line (up sloping red line) of the potential Rising Wedge pattern.
We’ll have a larger drop only after a valid breakdown from the Rising Wedge and below the upper median line (UML) of the major ascending pitchfork.
