The euro declined by 52 pips or 0.39% against the yen on Tuesday. A breakout occurred through the lower boundary of an ascending channel pattern during yesterday's trading session.
EUR/JPY reversed twice in a row and returned to the 132.50 region, trading at shouting distance from YTD highs on Wednesday.Given that a breakout has occurred, the exchange rate could continue to edge lower during the following trading session. The potential target for the currency pair would be near the 131.40 area.
If the buying impulse gathers extra pace the cross could attempt a move to the 133.00 neighborhood ahead of the September 2018 high at 133.13. Further gains remain likely while above the immediate support line (off the March lows) near 130.30.
In the broader picture, while above 126.57 the broader outlook for the pair should remain constructive.