EUR/JPY Price Analysis: Stays defensive around 158.00 with rising wedge, Eurozone PMI in the spotlight

• EUR/JPY struggles for clear directions after reversing from highest level since late 2008.
• Monthly rising wedge lures sellers amid bearish MACD signals.
• Downbeat RSI, multiple key supports and Eurozone PMI stand tall to challenge downside momentum.

EUR/JPY bears flirt with the short-term key support around 158.10 amid the initial hours of Wednesday’s European session as markets await the first readings of Eurozone and German PMIs for August. That said, the cross-currency pair rose to the highest level since August 2008 the previous day before posting the biggest daily loss in a month.

In doing so, the quote prods the bottom line of a monthly rising wedge bearish chart formation. Adding strength to the downside bias are the bearish MACD signals.

However, the below 50 levels of the RSI (14) line suggest the quote’s bottom-picking, which in turn highlights the 158.00 support.

In a case where the EUR/JPY sellers manage to break the 158.00 support and confirm the bearish formation, a horizontal area comprising multiple levels marked since August 01 and the 200-SMA, respectively near 157.60–50 and 156.75, will test the south-run aiming the theoretical target of the rising wedge, close to 153.50.

Meanwhile, EUR/JPY rebound may aim for the 159.00 round figure before poking the stated wedge’s top line surrounding 159.55.

Should the EUR/JPY pair remains firmer past 159.55 and defy the bearish chart pattern, the 160.00 round figure and July 2008 low near 165.30 will be in the spotlight.

EUR/JPY: Four-hour chart

Trend: Limited downside expected