
EURJPY price action is contracting as it approaches the 165 resistance level. The newly formed wedge-like pattern could be an early sign that bulls are starting to lose control. Asian currencies have begun gaining strength recently, and the Taiwan dollar’s surprise move is just one example of this trend.
At the same time, USDJPY is testing a major broken trendline. If USDJPY gets rejected at this level while EURUSD got rejected as well from the resistance around 1.1275, there is a strong chance that EURJPY could break out of the ascending wedge pattern to the downside.
In that scenario, the first strong target would be the 160 level, followed by a potential move toward the major 155 support, depending on broader market conditions.