EUR/JPY - Stuck in a 100-pip range

• EUR/JPY stuck in a 100-pip range (135.00 to 136.00).
• A high probability of a downside break as indicated by spinning top-like candles.

The EUR/JPY pair has been restricted to a 100-pip range (135.00-136.00) comprised of spinning top-like candles, suggesting the rally from the Jan. 11 low of 133.02 may have run out of steam.

The EUR bulls failed to take out 136.00 in a convincing manner in the last three trading days seemingly due to comments from ECB officials this week, highlighting concerns regarding the speed of the rise in the EUR.

Meanwhile, the downside has been capped around 135.00 levels, largely due to persistent demand in the USD/JPY pair around/below 111.00 levels.

As of writing, the currency pair is trading at 135.70. The spinning top-like candles indicate bulls are losing interest, given the pattern is found at the top of the uptrend. Hence, downside break of the 100-pip range is more likely.

The struggle for direction may come to an end later today following the release of the Japanese industrial production data. Also, Bundesbank President Weidmann speech could influence EUR pairs.

EUR/JPY Technical levels

An upside break of the trading range (135.00-136.00) would open doors for 136.64 (Jan. 5 high) and 137.00 (target as per the measured height method). On the downside, breach of support at 135.00 could yield a sell-off to 134.00 (target as per the measured height method) and 133.69 (50-day MA).