EUR/JPY Risks Bearish Reversal as Rising Wedge Approaches Upper Boundary
The EUR/JPY currency cross has continued its upward momentum for the fourth consecutive day, trading around 186.50 during the Asian hours on Friday. This bullish trend is supported by the fact that price remains above both the nine-period and 50-period Exponential Moving Averages (EMAs), as well as a 14-day Relative Strength Index (RSI) of around 60, indicating constructive upside momentum.
The daily chart technical analysis shows an ascending triangle has morphed into a rising wedge, signaling a shift from bullish accumulation to market exhaustion. This typically indicates a strong bearish reversal risk for the EUR/JPY cross. The currency is currently positioned within this rising wedge, targeting its upper boundary around 186.80.
If the upward trend continues, it could support the EUR/JPY cross in navigating the region around the all-time high of 187.95, recorded on April 17. On the downside, initial support lies at the nine-day EMA of 185.94, with additional backing at the 50-day EMA of 185.26, aligned with the lower boundary of the rising wedge.