The EUR/JPY drops and erases the last day’s minor gains. Is trading in the red as the Yen is supported by the Nikkei’s minor drop. The pair has developed a Rising Wedge pattern in the last weeks, I’ve said in the last articles that we may have a broader drop if the pattern will be confirmed. The Euro is losing ground versus the Yen as the bulls weren’t strong enough to keep the rate above very important resistance levels. However, we still need a confirmation that will drop further because this could be only temporary.
The European currency drops further even if the Euro-zone Retail PMI increased from 50.8 to 52.3 points, reaching the highest level of the last 3-months. Price is driven lower by the technical factors, a further Nikkei’s drop will force the Yen to appreciate versus all its rivals.
Price drops and approaches the downside line of the potential Rising Wedge pattern. It should drop much deeper after the failure to retest the median line (ml) of the black ascending pitchfork and after the failure to stabilize above the sliding line (SL). The Rising Wedge pattern could be confirmed if the Nikkei will slip lower in the upcoming days. Support can be found at the upper median line (UML) of the major ascending pitchfork, but a valid breakdown from the chart pattern will force the rate to take out this support.
