FX.co ★ EUR/JPY

Stability and formation of an equilateral triangle Since mid-2024, the EUR/JPY pair has been trading within an equilateral triangle pattern surrounded by descending resistance and ascending support lines, which forms a typical price pressure structure. These trend lines converge around 161.40-161.60, which corresponds to the current market price. The symmetrical triangle reflects the consolidation phase following the significant price movement earlier this year, especially the sharp drop from 174.00 to below 155.00. This stability indicates that the market has not yet settled and buyers and sellers are getting closer to each other. However, the closer the triangle is to the apex, the more likely it is to move decisively in either direction. The descending resistance line started from the high near 174.00 (March 2024) and extended to higher lows, which are now coinciding with the 162.60 area. This also coincides with the 38.2% Fib retracement level around 450.40, near the same high-low. Horizontal resistance and trend line intersections represent significant obstacles to upward momentum. Meanwhile, the ascending support line originates from the July 2024 low near 154.20 and continues to rise towards 160.20, experiencing significant fluctuations along the way. This level also coincides with the 23.6% Fib retracement level, making this area a support that could benefit from additional technical strength. A break below this area would trigger bearish momentum and a likely return to the 154.20 level, which could weaken incentives as the overall sentiment shifts towards risk aversion. Fib Levels and Horizontal Price Structure The Fib retracement line from the high 174.00 to the low 154.20 indicates several price levels that traders should pay attention to. The 23.6% level around 160.20 proved to be immediate support. A sustained breakout above this level could lead to a move towards the 0.0% retracement level at 154.20. This level is the minimum necessary level and is an area of high demand. In terms of resistance, the 38.2% retracement level at 162.60 acts as the first significant barrier. The 50.0% level is at 164.10, which acted as a medium-term reversal point in the previous price movement. If EUR/JPY closes above 164.10 with strong upward momentum, the next interesting level would be the 61.8% retracement level at 166.20. This level is also in line with previous resistance and consolidation levels seen in early 2024. The horizontal support and resistance lines visible within the range further support this analysis. The 158.90-159.20 zone has been the base for several upside moves and represents an important intermediate support area below the current price. On the positive side, the 163.80-164.00 area stands out as a congestion zone that needs to be broken through in order for the uptrend to continue. Confirming Ichimoku Cloud and Surfaces Ichimoku Cloud (KUMO) provides an additional layer of analysis. The current stock price is in conjunction with the cloud and is trading above a relatively thin cloud structure. A break above the cloud is interpreted as a bullish signal, especially if it is confirmed by a bullish reversal-Kyoto cross and a rising Chico span. On the other hand, if the price fails to hold support above the cloud and falls, this confirms bearish momentum falling into the lower limit of a symmetrical triangle. The Relative Strength Index (RSI) is currently at 51, reflecting neutral momentum. This suggests that the market is neither overbought nor oversold, supporting the idea that a major reversal is imminent. The MACD is rising slightly but without any major deviations, supporting the outlook for consolidation. Volume also declined slightly during this trading range, which is typical of movement before a breakout. Finally, The EUR/JPY pair is currently forming a clear symmetrical triangle pattern with key price levels near the upper limit. Immediate resistance is at 162.60 (38.2% Fib and upper limit of the triangle) while strong support is near 160.20 (23.6% Fib and lower limit of the triangle). A break above 162.60 could target 164.10 and 166.20, while a break below 160.20 could target 158.90 and 154.20. Traders should watch for price action near the upper limits of the three levels.