EUR/JPY: The Trend Is Still Pointing Higher, but Resistance Is Asking an Important Question
EUR/JPY: The Trend Is Still Pointing Higher, but Resistance Is Asking an Important Question
EUR/JPY is one of those pairs that can make traders question everything they thought they knew. You open the chart, draw a trendline from the recent swing lows on the four-hour timeframe, and the direction seems obvious. The structure is still producing higher lows, the trendline remains respected, and buyers haven't completely surrendered control. Then you zoom in a little more and notice something that doesn't quite fit the bullish picture—the market has stopped climbing.
Instead of extending the move higher after reaching resistance, price has settled into a narrow range. The candles are moving sideways, momentum has slowed, and neither buyers nor sellers appear willing to make the first decisive move. This is exactly the kind of market that creates confusion because the trend says one thing while the current price action says another.
When I find myself in this type of situation, I stop asking where I want the market to go and start asking what the market is trying to tell me.
The first thing I notice is that the uptrend has not actually been broken. The trendline that has guided the market higher is still intact, and every meaningful pullback has so far attracted buying interest before reaching a point that would damage the overall structure. That alone tells me the bulls haven't lost control of the bigger picture.
But trends don't move in straight lines.
Even the healthiest uptrend spends time resting, and that's what makes the current consolidation interesting. Some traders see sideways movement and immediately assume weakness. Others believe it's simply a pause before another breakout. Both ideas are possible, which is why the behaviour inside the range becomes more important than the range itself.
One detail I...
