EUR/JPY technical analysis: Breaching 5-month falling trendline

• EUR/JPY is teasing an upside break of a trendline falling from April highs. 
• A convincing close above trendline would confirm a bullish reversal. 

EUR/JPY is currently trading just above 119.64 – the resistance of the trendline connecting April 17 and July 1 highs. 

A convincing close above 119.64 would confirm the breakout and open the doors to 121.38 (July 30 high), as key indicators are already aligned in favor of the bulls. 

For instance, the 5- and 10-day moving averages are trending north and the 14-day relative strength index is reporting bullish conditions with an above-50 print. 

The breakout will likely remain elusive if the US Federal Reserve keeps rates unchanged or delivers a hawkish 25 basis point rate cut. Chief financial officers of major corporations surveyed by CNBC Global CFO Council believe a rate cut is coming. The odds for a 25 basis point September rate cut, however, stood at about 50-50 on Tuesday vs. 62% Monday and well over 90% a week earlier.

The Fed rate decision is scheduled at 18:00 GMT. 

Daily chart

Trend: Bullish

Technical levels