© Dukascopy Bank SA
During the period from Aug 2 to Aug 8 EUR/JPY, while being in a strong down-trend, covered four figures, but was unable to continue the decline beyond 128.33. Three days later the currency pair re-tested this support, but again unsuccessfully, which in turn led to formation of the double bottom pattern.
Right now the pair is probing the neckline at 129.69, which will be difficult to penetrate, given that this level is strengthened by the daily R1 and the 200-hour SMA. However, in case this area is broken, it will pave the way for sizeable gains, supposedly up to the daily R3 at 131.06, the height of several local highs.
© Dukascopy Bank SA