The euro/yen pair continues relentlessly and inevitably towards 120.
The addition to the chart is the upper trend line which is now acting as a resistance level. When this is combined with the lower trend line, this creates a "falling wedge" pattern.
A "falling wedge" is an elongated triangle that slopes downwards with the price rebounding lower between two converging trend lines. It is usually found in uptrends as a continuation pattern that slopes against the prevailing trend.
Sometimes, the "falling wedge" may materialize near the end of a prolonged downtrend where it can act as a reversal pattern. This suggests a longer-term bullish breakout for euro/yen but in the immediate short-term, the support target is near 120.
If the "falling wedge" pattern is projected forward then the intersection point of the wedge is near 112. The strength of the 120 support level suggests traders will watch for a rebound around July 2016. A rebound above 124.5 is a strong bullish signal and confirms the falling wedge breakout. The initial breakout upside target is near 127.
The breakout faces well established resistance levels created by a legacy of trading bands. The euro/yen moves between these trading bands using them alternatively as support and resistance levels. The 127 level is a well-established level and is will act as a resistance level.