EUR/JPY Price Analysis: Symmetrical Triangle advocates consolidation ahead

• The 20- and 50-period EMAs are overlapping to each other.
• A 40.00-60.00 range oscillation by the RSI (14) indicates the phase of topsy-turvy moves.
• The Symmetrical Triangle dictates slippage in volatility, followed by a breakout in the same.

The EUR/JPY pair is oscillating in a narrow range of 13510-135.44 in early Tokyo after a firmer move from its crucial support at 134.00. This week the cross has displayed topsy-turvy moves and has surrendered its entire gains recorded in the first two trading sessions of this week.

On an hourly scale, the formation of a Symmetrical Triangle chart pattern is indicating a rangebound move in the upcoming trading sessions. The ascending trendline is placed from the last week’s low at 132.66 while the downward sloping trendline is plotted from May 9 high at 138.32. Usually, a symmetrical triangle delivers a slippage in volatility, which is followed by a breakout in the same.

The 20- and 50-period Exponential Moving Averages (EMAs) are overlapping each other, which signals a consolidation going ahead.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which advocates a directionless move. Therefore, investors should brace for volatility contraction further.

A decisive drop below the Symmetrical Triangle at 134.70 after juggling in a tight range will drag the asset towards Thursday’s low at 133.93, followed by the last week’s low at 132.66.

Alternatively, the shared currency bulls could drive the asset higher towards Wednesday’s high and May 9 high at 136.67 and 138.32 respectively after an upside break of the Symmetrical Triangle at 135.50.

EUR/JPY hourly chart