The common European currency declined by 77 pips or 0.59% against the Japanese Yen on Tuesday. The currency pair breached the lower boundary of an ascending channel pattern during yesterday's trading session.
Currently, the exchange rate is trading near the lower boundary of a month old ascending trendline and could be set for a breakout lower soon. From a technical perspective, on th 4 hourly EUR/JPY made a bearish impulsive move on 16 March 2021 and currently correction towards 130.00 round figure mark.
If price fails to breach above 130.00 which coincides with fibonacci retracement zone
a decline towards the significant support resistance at 129.50 could be expected. The development of MACD indicator (bearish divergence ) hints at swelling downside momentum.A daily close below 129.50 likely propel price back towards former support at 128.8.
However, if the trendline holds, bullish traders could pressure the currency exchange rate higher.
