EUR/JPY Holds Gains Amid Rising Wedge Formation

The EUR/JPY currency cross has been gaining ground since yesterday's minor losses. On Monday, it traded around 186.50 during Asian hours, maintaining a bullish near-term bias. The short-term Exponential Moving Average (EMA) is above the longer-term EMA, suggesting a constructive trend backdrop.

The Relative Strength Index (RSI) is near 60, indicating firm but not yet overbought upside momentum. However, the rising wedge formation on the daily chart indicates a strong bearish reversal risk. The upper boundary of the wedge could serve as primary resistance around 186.90.

A break below the wedge would put downward pressure on the EUR/JPY cross to navigate the region around the five-month low of 181.87 and the seven-month low of 180.81. Initial support lies at the nine-day EMA of 186.04, followed by the 50-day EMA at 185.31, aligned with the lower boundary of the rising wedge.

The EUR/JPY cross could still explore the region around its all-time high of 187.95, recorded on April 17, if it surpasses the upper boundary of the wedge.