EUR/JPY continued its upward momentum for the fourth consecutive day, trading around 186.50 during Asian hours on Friday [1]. The currency pair is exhibiting a bullish near-term bias, with prices holding above both the nine-period and 50-period Exponential Moving Averages (EMAs), and a 14-day Relative Strength Index (RSI) near 60, indicating constructive upside momentum without entering overbought territory [1].
Technical analysis reveals that the daily chart pattern has shifted from an ascending triangle to a rising wedge, which typically signals a transition from bullish accumulation to potential market exhaustion and a heightened risk of a bearish reversal [1]. The EUR/JPY cross is currently positioned within this rising wedge, targeting the upper boundary around 186.80. A further advance could see the pair test the all-time high of 187.95, recorded on April 17 [1].
On the downside, initial support is identified at the nine-day EMA of 185.94, with additional support at the 50-day EMA of 185.26, which aligns with the lower boundary of the rising wedge. Should the price break below this wedge, it could face downward pressure toward the five-month low of 181.87 (March 16) and the seven-month low of 180.81 [1].
In terms of broader currency performance, the Euro was the strongest against the US Dollar today, with a 0.09% gain, while EUR/JPY saw a marginal decline of 0.02% [1]. This suggests that while the Euro is generally strong, the EUR/JPY pair may be approaching a technical inflection point.
CONCLUSION
EUR/JPY's sustained rally has brought it close to its all-time high, but technical patterns indicate a rising risk of bearish reversal. Traders should monitor key support and resistance levels as the pair navigates this critical juncture.