The EURJPY cross has been moving sideways since December, and it has been consolidating for six weeks. On Thursday, it was flat near 126.10 at the time of writing, but it seems ready to break from the consolidation pattern.
The major support appears to be in the 125.80 area, where the medium-term uptrend line is converged with the lower bound of the consolidation formation. If the euro drops below this support, we could see a steeper decline, targeting 125 in the initial reaction.
The full potential of the consolidation formation is circa 170 pips, so that bears will be targeting the 124 level.
Usually, after weeks of no volatility, markets will start to move violently when a break from the consolidation range occurs. The same can happen here.
Alternatively, if the euro defends the mentioned support, we might see a small rally. The resistance could be at 127, followed by the current cycle highs of 127.50. A break above 127.50 would confirm the bullish trend, targeting the 129.20 zone (170 pips potential of the formation).