EUR/JPY Price Analysis: Shared currency invalidates 2.5-year descending trendline

• EUR/JPY breaches trendline falling from January 2018 highs. 
• A breakout, if confirmed on weekly closing basis, would expose highs seen in May. 

EUR/JPY is trading at 121.77 at press time, representing a 0.20% gain on the day and a 0.71% rise on a week-to-date basis. 

The weekly chart shows the pair has breached the trendline connecting January 2018 and September 2018 highs. As of writing, the former hurdle-turned-support is located at 121.40. 

An upside break of the descending trendline would be confirmed if the pair ends above 121.40 on Friday. That would imply an end of the 2.5-year-long bearish trend from 137.50 and put the bulls back into the driver’s seat. 

The breakout, if confirmed, would shift the focus to resistance at 124.43 (May high). However, if the pair fails to keep gains above the trendline, sellers will likely feel emboldened and may push the JPY cross lower to 119.31 (June low). 

Weekly chart

Trend: Cautiously bullish

Technical levels