EUR/JPY technical analysis: Nears 119, six month falling trendline breached

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  • EUR/JPY has found acceptance above a key trendline from April highs. 
  • The breakout is backed by bullish readings on key indicators. 
  • The pair could challenge the 50-day moving average hurdle in the short term. 

EUR/JPY is looking north, having found acceptance above key falling trendline resistance.

The pair jumped 0.76% on Thursday, confirming an upside break of the trendline connecting April 17 and July 1 highs.

The breakout validates the bullish higher low of 117.07 created on Oct. 7 and indicates the path of least resistance is to the higher side.

The breakout is also backed by a bullish crossover on the MACD histogram and ascending 5- and 10-day moving averages.

As a result, a convincing break above 119.00 could be in the offing. On the higher side, key resistance is seen at 119.86 (50-day moving average).

The bullish outlook would be invalidated if the pair falls back below the trendline. That could happen if the ongoing US-China trade talks end on a sour note, triggering a flight to safety. As of writing, the pair is trading at 118.94, representing marginal gains on the day. 

Daily chart

Trend: Bullish

Technical levels

 

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