Bullish breakout risk as markets fade escalation Euro / Japanese YenFOREXCOM:EURJPYdavidscuttWe can see EUR/JPY has been coiling within a compression structure for more than a month, with downtrend resistance from the January 23 highs now marginally overhead after the price moved back above the influential 50DMA earlier this week. With ATR (14) declining to the lowest level since late January as the structure narrows, it gives a sense that if and when we do see a breakout, it could be powerful. With the price continuing to trade well above longer-term moving averages which are still sloping higher, and having entered the structure following an extended bullish trend, it feels like the more likely outcome is a bullish rather than bearish breakout, putting a potential retest of the January highs in play. Standing in the way of that outcome, swing highs of 184.80 and 186.23 sit beyond the January trendline, making them reference points of note for bulls. Should the pair take out the January high of 186.90, it would signal a resumption of the prior bullish trend. If the price is rejected at the downtrend once again, the 50 and 100DMAs are the levels to watch before the February uptrend comes into view. A break of the latter would put 182 support and the double bottom of 181.80 in play for shorts. The oscillators are more neutral than anything, although they marginally favour an upside bias. RSI (14) is setting higher lows and higher highs and is now back above 50, while MACD has confirmed the marginally bullish signal by staging a bullish crossover above zero.