The EUR/JPY increased sharply today and erased the yesterday’s losses. Price is strongly bullish right now, but this rebound could be only temporary and the rate could turn to the downside again. The pair reached a strong confluence area, so we may have a trading opportunity very soon. Technically, it was somehow expected to drop further on the short term, but we still need a confirmation.
We’ll see what will happen because the Yen is punished by the Nikkei’s rally, the index climb further and reached the 21427 high. A further increase will force the Yen to depreciate versus all its rivals. EUR/JPY increased only because the JP225 has extended the upside momentum.
We’ll see how long Nikkie’s upside movement will be because we may have a minor retreat after the impressive rally. The USD X is pressuring the 93.81 static resistance and seems a little exhausted, a USDX’s drop will signal a Nikkei’s drop as well.
EUR/JPY is testing the confluence area formed between the outside sliding line (SL) with the downside line of the Rising Wedge pattern, a rejection will signal a drop at least till the upper median line (UML) of the major red ascending pitchfork. However, a valid breakout above the confluence area will accelerate the bullish momentum.