EUR/JPY has formed lower highs and higher lows inside a symmetrical triangle pattern on its 4-hour time frame.
Price is testing resistance and could be gearing up for a breakout soon, but which way will it go?
Check out these potential targets in either direction!
EUR/JPY 4-hour Forex – Chart Faster with TradingView
With the European Central Bank and Bank of Japan lined up to announce their monetary policy decisions later this week, it’s no surprise that EUR/JPY is stuck in a holding pattern.
After all, the BOJ has already started its tightening cycle while rate hike expectations have recently picked up for the ECB ever since the US-Iran war broke out.
Is the pair ready to bust through the triangle resistance?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the euro and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Price is hanging out around R1 (183.58) which lines up with the triangle top, so keep your eyes peeled for long green candlesticks closing above this area that could confirm euro bulls are charging.
If this happens, EUR/JPY could set its sights on the next upside target at R2 (184.71) then R3 (185.35) as it attempts to climb the same height as the chart formation or roughly 500 pips.
On the other hand, should the triangle resistance keep holding as a ceiling, look out for a dip back to support around the 183.00 major psychological level or even a breakdown to the bearish targets at S1 (181.71) then S2 (181.07).
Just be sure to account for additional volatility during the central bank events, as breakouts could prove to be fake outs!
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Promoted: The Analysis & Strategy are only half the Battle; Your Mindset is the Rest.
Today’s chart art focuses in on a potential EUR/JPY breakout. But as any pro will tell you, even the cleanest trend-following setup can fall apart if the trader doesn’t stay disciplined when price starts testing the level.
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Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
