The EUR/JPY is staging a solid upside recovery after the pair recently fell to its weakest trading level since November 2016.
EUR/JPY analysis shows that a bullish falling wedge pattern is currently unfolding on the lower time frames.
EUR/JPY medium-term price trend
The euro is attempting to build on recent gains against the Japanese yen currency, after the pair found strong technical support from the 114.50 level.
EUR/JPY technical analysis over the medium term shows that the recent drop towards the 114.50 level has created a bearish head-and-shoulders pattern.
The daily time frame shows that a final right-hand shoulder may be forming to complete the bearish head-and-shoulders pattern.
According to the size of the bearish pattern the EUR/JPY pair could drop by around 2,000 points if the 114.50 level is broken.
The EUR/JPY pair may target its 200-day moving average, around the 119.00 level, if the 117.00 level is overcome.
EUR/JPY short-term price trend
EUR/JPY technical analysis over the short term highlights that the pair has a bearish trading bias while price trades below the 117.20 level.
The lower time frames show that a falling wedge pattern is starting to unfold. Typically, these patterns are considered bullish reversal patterns.
Traders should note that a breakout above the 117.00 resistance could trigger the bullish pattern into action.
Watch out for a rally through to the 119.00 to 120.00 technical area if the 117.00 resistance level is overcome.
EUR/JPY technical summary
EUR/JPY analysis shows that more short-term upside may be on the horizon if the 117.00 level is overcome. The medium-term picture appears to be more bearish for the pair.