The EUR/JPY currency pair dipped slightly after a day of gains, trading near 183.90 during Friday’s Asian session. It continues to remain below the 9-period and 50-period exponential moving averages (EMAs), which are at 184.38 and 184.91, respectively, suggesting a bearish outlook in the near term.
This pair is caught in a symmetrical triangle, indicating some hesitance in the market and a potential breakout as tension builds. Meanwhile, the 14-day Relative Strength Index (RSI) is moving lower towards 38, hinting at ongoing downward pressure rather than a clear oversold situation.
Interestingly, the session’s volume-weighted average price (VWAP)—which shows the average price paid for the asset during the day, accounting for volume—is sitting lower than the current spot price at 183.81. This indicates that buyers are still in control, willing to pay more to acquire the EUR/JPY cross.
In a symmetrical triangle formation, you can imagine volatility decreasing; it’s similar to a tightly coiled spring. This phase suggests that the market is gathering momentum for a significant breakout. Since prices are confined between two converging trend lines, momentum indicators like VWAP often lack direction until something breaks the pattern.
The initial support level rests at the lower boundary of the symmetrical triangle, around 183.40. If the price drops further, it could reach a six-month low of 180.81, following a four-month low of 181.87 recorded back in mid-March.
Looking at resistance, the key level is identified at the 9-period EMA of 184.38, with the next level at the 50-period EMA of 184.91. A sustained breakthrough above these points could shift the bearish sentiment and potentially lead to a test of the triangle’s upper limit near 186.00. Further advances might provide the necessary support for the EUR/JPY to challenge its historical high of 187.95.
