Price Analysis: EUR/JPY Symmetrical Triangle Signals Upcoming Consolidation

The EUR/JPY pair is bouncing within a narrow range of 13510-135.44 at the start of the Tokyo session, following a stronger advance from its critical support at 134.00. This week, the cross has showed erratic behavior and has relinquished all of its gains from the first two trading sessions.

The creation of a Symmetrical Triangle on an hourly basis suggests a rangebound motion in the following trading sessions. The ascending trendline is drawn from the previous week's low of 132.66, while the descending trendline is drawn from the May 9 high of 138.32. A symmetrical triangle typically results in a decline in volatility, followed by a breakout in the same.

The 20-period and 50-period Exponential Moving Averages (EMAs) are overlapping, indicating an impending consolidation.

Meanwhile, the Relative Strength Index (RSI) (14) oscillates between 40.00 and 60.00, indicating a lack of direction. Therefore, investors should anticipate a further reduction in volatility.

After fluctuating in a tight range, a significant decline below the Symmetrical Triangle at 134.70 will push the asset towards Thursday's bottom at 133.93, followed by last week's low at 132.66.

Alternately, the shared currency bulls might propel the asset higher towards Wednesday's high of 136.67 and May 9's high of 138.32 if the Symmetrical Triangle is broken to the upside at 135.5.

Hourly EUR/JPY Chart