The single European currency declined by 80 points or 0.65% against the Japanese yen on Wednesday. EUR/JPY is currently holding at 122.70 back in the range. If we see a breakthrough above the significant key level of 122.50, we can expect a continuation of the movement to the target at 124.00 phycological area.
In the early session, EUR/JPY formed an inverted Head and Shoulders (HNS) reversal pattern. This reversal pattern confirms the bearish move from 20-30th October that may turn into a near-term bull market coupled with a bullish impulse breakthrough to test. Currently, the price is about to retest the neckline breakout boundary of the pattern.
If the breakout occurs above 123.00, a surge towards the 124.0 level could be expected to a retest the ascending trend line. However, if the channel pattern fails to hold, bears might drive the price back to October low in the following trading days.
