EUR/JPY : Double Top and Triangle as a Reversal Pattern Spells Trouble for Bulls

The EUR/JPY pair forms a triangle against strong resistance and is in danger of putting a double top pattern. The more time passes without a clear break of this triangle to the upside, the more the sellers will pressure the cross.

A triangle like the one seen below typically builds pressure against a horizontal line. However, the time it takes to consolidate is shorter than seen below, so bulls may be trapped here.

On the one hand, the market may pop higher in a false break and quickly retrace below the lower edge of the triangle. On the other hand, a direct move below the lower edge will confirm the triangle as a reversal pattern.

Euro remains bid as the vaccination campaign in Europe gains steam by the day. The European Commission announced that it would end the contracts with Johnson & Johnson and AstraZeneca when they expire and replace the jabs with more from Pfizer/BioNTech.

The key here is to see how fast Europe manages to reach herd immunity – the faster, the better for the economy and the common currency.

EUR/JPY Technical Analysis

The technical picture, as mentioned earlier, looks bearish. Bears may want to wait for a break below the lower edge of the triangle before selling against the highs with a risk-reward ratio of 1:2.

Don’t miss a beat! Follow us on Telegram and Twitter.

Dow Jones Daily Chart

More content

Related Posts:

Compare accounts

Name ATFX Binance

Awarded and global FX/CFD broker. Well-regulated in multiple jurisdictions. Offers great spreads and liquidity for FX, Indices, and Commodities trading.

Cryptocurrency exchange with over 150 coins. As of Jan 18, Binance was the world's largest cryptocurrency exchange per volume.