The EUR/JPY currency pair has been in the spotlight recently, with the Euro reaching a multi-year high against the Japanese Yen at 159.296. This significant milestone has been tested thrice, leading to the formation of a rising triangle pattern, a classic technical indicator of price consolidation.
This pattern has been the battleground for both bulls and bears. The Euro's recent weakening has emboldened sellers, who are eyeing the previous low of 158.822. This level aligns perfectly with the triangle's lower band. Should the sellers manage to close below this pivotal point, it could pave the way for a further descent to 158.621. A breach of this level could trigger a domino effect, attracting a swarm of sellers targeting the 158.251 mark.
On the flip side, the 158.822 level is a beacon of hope for buyers. If they successfully defend this crucial support, it would uphold the integrity of the rising triangle pattern. This would rekindle bullish aspirations, with eyes set on retesting the upper echelon at 159.296.
Oscillators Weigh In
Diving deeper into the technical oscillators, they paint a rather bearish picture. The Relative Strength Index (RSI) has been languishing below the 50-mark, indicating a selling bias. The Momentum indicator's sluggish movement below the 100 threshold further corroborates this bearish sentiment. Moreover, the Moving Average Convergence Divergence (MACD) bars are inching closer to the zero line, signaling that bearish momentum is gathering steam.
In conclusion, while the EUR/JPY has showcased a tug of war between bulls and bears around pivotal levels, current technical indicators lean towards a bearish bias. Traders should tread cautiously and monitor the 158.822 support level closely, as it could dictate the pair's short-term trajectory.
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