The purpose to follow EUR/JPY is because it's a classic risk on/ risk off market determinant currency pair because it holds the distinction of most widely traded cross pair in both daily amounts and daily average turnover since 2001. The only other pair to serve the view in risk on/risk off is CAD/ZAR. The difference between CAD/ZAR and EUR/JPY is CAD/ZAR is well supported longer term, so to declare formal risk off markets then breaks must be seen at 8.7667 and 8.5087 from current 10.3200. The overall market message from CAD/ZAR is currency markets remain in risk off mode, which means EUR/USD rises are corrections unless CAD/ZAR breaks 8.7667. What CAD/ZAR offers is a larger market view, while EUR/JPY serves short to medium and sometimes longer terms. Why sometimes is because our markets reach undecided points in its prices, such as today's price conundrum.
Viewed from correlations, EUR/USD correlates to EUR/JPY 42%, while USD/JPY correlates 0.03%. Despite a highly oversold EUR/JPY, it doesn't have the impetus to move higher, as its price power is known 42% and unknown variations of 57%. The EUR/JPY polemic is it doesn't know where to go; it's undecided, it lacks direction, movements, and this is why ranges dominated this pair for many months. Undecided prices are seen as much in price structures as reflections of Monetary policies. Does Yellen raise or not raise, EUR/JPY doesn't know either.
The big break below for EUR/JPY is 132.51, a point barely unchangeable for many many months. A long held belief is if EUR/JPY breaks 132.51, then a new market structure advances to a new realignment period in which risk off is formalized for the longer term that could easily last for years in the future. The warning is here as EUR/JPY contained in ranges for long periods is the message.
Short and long term, EUR/JPY is severely oversold. Oversold for EUR/JPY means current prices sit dead on the long term lines. Intraday, the overbought 5 - 50 day moving averages drive current prices. Shorts intraday must see breaks at 136.00 and 135.12 to have any chance to 132.51.