EUR-JPY: Looking for Direction

EUR-JPY: The pair continues to trade within its established weekly symmetrical triangle, suggesting that a breakout either way will trigger meaningful directional moves.

As the pair approaches the chart pattern apex, the likelihood of a break continues to be seen. With a bounce ahead of the pattern base during the past week, the pair now looks to build on those gains toward the 135.71 level, the Nov. 4 high. A break there would put the cross currency pair in position to move higher toward 137.83, which represents the pattern top.

Decisively invalidating that level will confirm a breakout of the symmetrical triangle and shift the focus to the 138.47 level, the Oct. 26 high, and then 139.22, the year-to-date high.

On the other hand, if downside pressure is seen, the pair will target the pattern base at 131.57 and then 130.97, the Nov. 1 low. A breach there would extend further downside pressure toward the psychological level at 130.00 and 128.98 level, the Oct. 2 low. The weekly stochastic has turned lower, supporting this view.

On the whole, the pair maintains its overall corrective outlook and looks set to break out of its triangle and trigger a directional move.