The euro and yen have both been under pressure since the second quarter of 2018. The strength of other competing economies could bear some of the responsibility.
Fundamentally, the EU and Japan are undergoing their own economic transition period. The EU may have a complete Brexit deal to be signed as early as in November, but regional economic growth is softening. On the other hand, Japanese GDP is higher but inflation readings remain at a lower level. In times like this, where fundamental analyses are confusing, it may be a good idea to take a step back to see things from the technical angle.
On a daily chart of the EUR/JPY, a possible trading opportunity may be present. Taking a look from the broader side, there is a stronger resistance level at around ¥131.00. This level has been tested multiple times since August 2017. The break of this level saw an upward trend that eventually reached a peak at around ¥137.5 in September 2017. Failures at this point have resulted in a stronger downward movement, which eventually touched around ¥125.00 in May and August 2018.
Looking at a shorter timeframe, a possible double top may be forming, potentially leading to a short-term downward trend towards the first support level at around ¥128.00. However, if the resistance level at around ¥131.00 is broken, a potential upward trend could form and test the next resistance level at around ¥133.00.
The level around ¥131.00 maybe the inflection point for the EUR/JPY. Traders should be alert for signals from their own metrics or technical analysis to determine their side of the action.