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- EUR/JPY could face initial resistance around the rising wedge top at 186.90.
- The 14-day Relative Strength Index near 60 indicates firm upside momentum without entering overbought territory.
- The primary support lies at the nine-day EMA of 186.04.
EUR/JPY gains ground after registering minor losses in the previous day, trading around 186.50 during the Asian hours on Monday. The currency cross is keeping a bullish near-term bias as it holds above both the nine-period and 50-period Exponential Moving Averages (EMAs). The configuration of the short-term EMA above the longer-term EMA suggests a constructive trend backdrop.
Meanwhile, the 14-day Relative Strength Index (RSI) near 60 points to firm but not yet overbought upside momentum, hinting that buyers still retain control unless price slips back below the nearby averages. However, the daily chart technical analysis shows that the EUR/JPY cross is rising within a rising wedge, indicating a strong bearish reversal risk.
The EUR/JPY cross could find the primary resistance at the upper boundary of the rising wedge around 186.90. Further advances could support the currency cross to explore the region around the all-time high of 187.95, which was recorded on April 17.
On the downside, the initial support lies at the nine-day EMA of 186.04, followed by the 50-day EMA at 185.31, aligned with the lower boundary of the rising wedge. A break below the wedge put downward pressure on the EUR/JPY cross to navigate the region around the five-month low of 181.87, recorded on March 16, and the seven-month low of 180.81.
