EUR/JPY descends into a symmetrical triangle; nears the lower boundary.
EUR/JPY slid down in the last week to near the lower boundary of a symmetrical triangle, that began almost two months ago on May 21, where the seller’s momentum evaporated. Today sellers are pushing down again heading for a retest.
Following the price decline from the upper boundary to the lower boundary, the MACD moved to the negative area where both the MACD and trigger line flattened out. The RSI trended down and is currently flat but pointing slightly south near 30 level. The ADX suggests the absence of a trend.
For further stretch downwards, sellers would need to push through the lower boundary of the symmetrical triangle coupled with the initial support of 121.08 before testing the previous ascending lows of the triangle formation. Those being firstly 120.95 and secondly 120.77.
Although the long-term simple moving averages (SMAs) of the 50- and 100-days suggest further losses, for shifts back up, the enforced lower boundary would need to hold, with an immediate resistance of 121.30 being initially tested. The next obstacle that would need to be fractured for the upper boundary highs to come into play would be 121.65 and 121.85.
Ultimately a breach of the upper boundary and high of 122.30 would turn the outlook bullish in the short-term. Whereas in the medium-term, the price seems to need a break of the triangle boundaries to set a definitive direction.
All trading involves risk. It is possible to lose all your capital
This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.