EUR/JPY Trapped in a Triangle Pattern – Is it an Opportunity?

The EUR/JPY bounced off a bullish trendline support of 128.250 during the early Asian session, due to sudden weakness in the Japanese Yen as well as a strengthening Euro. It’s mostly due to the US dollar, and here’s what’s going on…

US-China Trade War

The trade war between the United States and China caused a massive buying in the dollar. Investors know that the USA has less to lose in this trade war which is why they increased dollar’s demand.

But here’s the thing – the US and China are likely to negotiate during the G20 Summit and if both of them come to a lenient tariff policy, this is going to put the dollar under massive selling pressure. Therefore, the dollar is getting weaker on sentiments and a weaker dollar makes the Euro stronger. Hence, the EUR/JPY also got a chance to bounce off the support area.

Support Resistance
128.58 129.16
128.24 129.41
127.65 129.99
Key Trading Level: 128.82

Technically, the pair is likely to face a significant resistance near 129.050 and the violation of this level can lead the pair towards 129.350 and 129.850. On the other hand, we may have a sell opportunity below 129 to target 128.750 and 128.550 but only if EUR/JPY manages to hold below 129.

Good luck!