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EUR/JPY - bullish breakout with confrimation

EUR/JPY is bullish in the short-term. It came out of a textbook breakout and confirmation as we will see in the 4H chart below.

EUR/JPY 4H Chart 8/31

(click to enlarge)

The prevailing downswing:
- We first go back to the price top.
- Note that there was essentially a double top followed by a pullback that tested 117 as resistance.
- After the market respected the price top, EUR/JPY fell down to 112.30. 

Consolidation:
- After price reached 112.30, it started to trade sideways, in a range roughly between 112.30 and 114.
- We saw that toward the end of August price failed to come back down to 112.30. The fact it missed reaching support suggests bullish bias. This is probably the first real sign of bullish reversal.

Breakout and confirmation:

- Price action eventually popped up above the consolidation range.
- Then, it retreated from 114.50, which was a previous support/resistance pivot.The RSI was also overbought (above 70) when price hit 114.50. 
- A pullback followed, but it respected the previous range resistance at 114.00 as support. 
- I would have said that as long as price held above 113.20, it was bullish, but the market did not have to reach that deep back into the range. It respected the range as support at 114.50.

Bearish diversion and resistance:
- The bullish reversal attempt looks good at the moment with price above the SMAs and the RSI pushing above 70.
- However, we should note a bearish divergence between price and the RSI, which suggests that gas might be running out for the upswing.
- Also, there will be a key support/resistance pivot around 115.50-116.00 area.  
- Furthermore, when we look at the daily chart, we can see that the RSI is approaching 60. With a prevailing downtrend intact, we should respect the bearish momentum and anticipate resistance as price approaches or enters the 115.50-116 area. 

EUR/JPY Daily Chart 8/31

(click to enlarge)