Possible breakout on the EUR/JPY of the 142.00 level to the upside.

The Euro has been strengthening for today versus most of the main currencies after an inflow of safe haven capital came into the Euro seeking shelter, because of the tensions in the Ukraine. Another factor that has helped the Euro is that there is a high expectation that the inflation in the Euro Zone has risen. This implies that the European Central Bank may not need to implement more economic stimulus.

However, the Euro retraces a little bit of its gains towards the end of the American session and it stays oscillating versus the Yen just below the 142.00 level, as shown on the 4 hour chart below. We can also see on the chart that the price has created some type of bullish flag or pennant with a high probability of a breakout to the upside. Therefore, we should be attentive to a possible breakout and then the pullback for a possible long entry.