The EURJPY pair attempted to reach the 133.500 level this week but has dropped back to form a triangular pattern. This is forming inside a larger wedge pattern, marked out here with blue trend lines, and the recent high formed the third touch on the top line of this pattern. A break higher above the red trend line at 1.33250 would target the previous high, followed by the 133.479 level and the rising trend line at 133.594. Above this area, resistance levels come in at 133.820, 134.493 and 135.000. The small blue supporting trend line comes in at 132.911, with a loss of this line sending prices towards the 50-period MA at 132.683 and the bigger supporting trend line at 132.520. A loss of this line would trigger new short positions, with the pattern becoming a rising bearish wedge. At this point, a large move lower could occur, with the 100-period MA at 132.286 and the 200-period MA at 132.022 taken out, and 131.815 tested, possibly offering a bounce for a retest of the wedge bottom. Targets in the short term come in at the 131.000 level and the 130.555 area, followed by 130.000. GER30 Index The GER30 index has been pushed lower, creating a false breakout on the daily chart above the red trend line. The chart shows the 12375.50 level has been used as support today, with yesterday’s low coming in at 12309.50. A loss of these supports would indicate a leg lower, targeting the 12212.00 level, followed by 12096.50 and 12000.00. Below 12000.00 the price enters a supportive area that can see buyers stepping in, with trend line support at 11825.00 and the previous low at 11681.20. Below the 11400.00 level, the market would turn very bearish and could free fall to 10850.00. Resistance comes in around the 12475.00 level and the red trend line. A break above this area has to overcome the 100 and 200 DMAs at 12525.0 and then the black trend line at 12610.00, with the high from Tuesday at 12650.00. A break higher can put pressure on bearish stops and extend up to 12820.00, followed by 12900.00 and 13000.00. But at the moment, the picture remains neutral ahead of the ECB release today.
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