EUR/JPY Price Analysis: Still inside the woods, 135.60 a key support

• A Symmetrical Triangle formation indicates a volatility contraction.
• The asset is displaying a consolidation phase for the past two weeks.
• For a downside move, the RSI (14) needs to slip below 40.00 decisively.

The EUR/JPY pair is displaying a balanced market profile for the past two weeks after declining from the August 10 high at 138.40. In the Asian session, the cross is juggling in a narrow range of 136.00-136.23 and is likely to continue its sideways move till the release of a potential rigger for a decisive move.

The formation of a Symmetrical Triangle chart pattern on an hourly scale indicates a contraction in volatility. The upward-sloping trendline of the above-mentioned chart pattern is placed from August 16 low at 134.95 while the downward-sloping trendline is plotted from August 10 high at 138.40. An explosion of the symmetrical triangle will result in higher volume and wider ticks.

The 50-period Exponential Moving Average (EMA) at 136.35 is overlapping with the cross prices, which indicates a continuation of rangebound moves.

Also, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which signals the unavailability of a potential trigger.

Should the asset drops below August 4 low at 135.64, yen bulls will get strengthened further. An occurrence of the same will drag the cross towards the previous week’s low at 134.90, followed by August 2 low at 133.40.

On the contrary, the shared currency bulls could defy the downside momentum if the cross oversteps the round-level resistance of 138.00. This will drive the asset towards July 29 high at 139.51, followed by July 18 high at 140.80.

EUR/JPY four-hour chart