EUR/JPY Price Analysis: Daily support is critical for bullish long-term breakout

• EUR/JPY is on the verge of a bullish breakout so long as monthly resistance turns to support. 
• The 4-hour chart is yet to offer a bullish environment for bulls to engage with.

EUR/JPY bulls need to step up to the plate at a critical level of support identified on the daily and weekly charts. 

The following is a top-down analysis that illustrates the monthly’s resistance underpressure from a higher high printed in January. 

Monthly chart

From a monthly perspective, the price is struggling to break free and beyond the strong level of resistance which is a familiar territory looking left on the chart. 

However, the high above the prior highs is encouraging. The restest needs to hold and convincingly so, yet it is still early days in the new month at the moment.

Weekly chart

The weekly chart is also encouraging given the price action.

Bulls have reemerged from a 50% mean reversion level and a test of the W-formation’s neckline. The fact that it held is compelling for an upside continuation. 

Daily chart

We have seen a strong sell-off from the resistance which has pared an equally strong bid. 

However, given the weekly and monthly bullish bias, the balance is tipped in the bulls favour on the daily chart and the support structure would be now expected to hold. 

4-hour chart

Bulls would be prudent to wait to see if the conditions turn bullish on the lower time frames and when the price can break the overhead resistance on the 4-hour chart.