September 5, 2013 – EUR/JPY (daily chart) has continued its consolidation within a large and clear triangle pattern. This pattern occurs within the context of a strong bullish trend extending back to the July 2012 low around 94.00. It also occurs after this bullish trend peaked at 133.80 in late May. Since that peak, the last three months have seen a converging consolidation in the form of the triangle pattern.
The pair is currently near the top of the pattern, potentially seeking a breakout to the upside. Price action is above both the 200-day and 50-day moving averages, both of which are indicating a continued bullish trend bias. With major downside support around the bottom of the triangle and then the 128.00 price region, the key technical event to watch for would be a breakout above the triangle, in which case the immediate resistance objective to the upside would be the noted 133.80 peak. Any breakout above that high would confirm an uptrend continuation with further objectives around the 136.00 and then 138.70 resistance levels.
James Chen, CMT
Chief Technical Strategist
City Index Group
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