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While the boundaries of this channel may not seem to be reliable, there is a good chance they are going to be respected by the market in the future. EUR/JPY has just hit the rock bottom at 138 on May 19 and is therefore likely to continue recovering.
Given the current downward correction, in order for the Euro to confirm its bullish intentions and at the same time the pattern, the currency is required to turn around ahead of the Jun 5 low at 139.69 and then move out towards 140.20, namely the up-trend resistance of the potential channel. In the meantime, the market does not seem to be supportive of a rally, being that right now 61% of open positions are short.
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