EUR/JPY technical analysis: 121.38 is the level to beat for bulls

• EUR/JPY's 4-hour chart shows a bearish channel breakout. 
• The pair needs to clear a newfound resistance at 121.38 to validate the bullish breakout. 

EUR/JPY violated a bearish channel on July 25, confirming a short-term bearish-to-bullish trend change.

The upside, however, has been capped at 121.38 ever since.

As a result, 121.38 is the level to beat for the bulls. A break above that level would reinforce the channel breakout and open the doors to the bearish lower high of 122.32 created on July 10.

On the way higher, the pair may face resistance at the 50-day moving average, currently at 121.75.

Supporting the bullish case is the daily chart moving average convergence divergence histogram, which has crossed above zero confirming a bull reversal.

The bullish case would weaken if the pair finds acceptance below 120.73.

As of writing, the pair is trading largely unchanged on the day at 121.08.

4-hour chart

Trend: Bullish

Pivot points