EUR/JPY 4H Chart: Descending Broadening Wedge

After reaching a high of 145.69 during the last days of 2013, EUR/JPY has been trending lower, but at the same time its volatility has been on the rise, resulting in appearance of the descending broadening wedge, a reversal pattern. It is also important to notice that the formation is a correction of the bull market we have been observing since November.

Accordingly, we expect the down-trend resistance line, currently near the round level of 140, to be eventually breached. Still, we should be aware of the fact that four-hour and daily technicals are bearish, meaning the Euro could travel down to 134 before regaining a strong upward momentum.