The EUR/JPY currency pair is approaching a potentially important technical juncture after recovering from recent lows, with its four-hour chart showing a rounded, cup-like formation that could support a bullish reversal if price breaks above nearby resistance. The pair was trading around 177.565 in the TradingView chart dated October 18, 2026, as traders assessed whether the latest recovery could develop into a broader upward move.
The pattern has attracted attention because the market has rebounded from the 176.00–176.50 area and returned toward the 177.50–178.00 region. However, a sustained breakout has not yet been confirmed, leaving the next few four-hour candles important for determining the direction of the move.
A Recovery From October Lows Brings Resistance Into Focus
The chart shows EUR/JPY declining from levels above 181.00 in late September before moving into a choppy trading range during October. Selling pressure pushed the pair toward the 176.00 area, where the decline began to lose momentum.
Since then, price action has become more constructive. The pair has made a recovery toward 177.565, bringing it close to the descending upper boundary of the highlighted formation.
This area matters because previous price movements show that the pair has struggled to establish a sustained move higher. A decisive break above the nearby resistance zone could indicate that buyers are gaining greater control, while another rejection could leave the market trading sideways or testing lower support.
Does the Rounded Formation Signal a Bullish Reversal?
The highlighted structure resembles a cup-shaped recovery, with price declining into a rounded bottom and subsequently climbing toward the upper boundary. Traders often watch such formations for signs that selling pressure is weakening and buying interest is returning.
Yet the shape alone is not enough to confirm a bullish reversal. The pattern needs to be supported by price action, particularly a clear close above resistance followed by an ability to hold the breakout area.
For EUR/JPY, the immediate technical zone is around 177.70–178.00. A sustained move above this area could strengthen the bullish case, although the market would still need to overcome additional resistance before reaching the higher levels indicated by the chart's projected arrow.
The distinction between a possible setup and a confirmed breakout is important. Price can briefly move above a trendline and then fall back below it, creating a false breakout that traps traders who enter too early.
The Price Levels Traders May Want to Watch
Several areas stand out on the four-hour chart as potential reference points for the next move.
| Price area | Technical significance |
|---|---|
| 180.00–180.60 | Higher potential resistance if bullish momentum continues |
| 178.00 | Immediate psychological and technical resistance zone |
| 177.50–177.70 | Current price area and nearby breakout region |
| 177.00 | Intermediate support during a pullback |
| 176.00–176.50 | Recent lows and an important support zone |
These levels are approximate chart-based reference points, not guaranteed turning points or precise trade signals.
If EUR/JPY closes convincingly above 178.00 on the four-hour timeframe, traders may look for a continuation toward 179.00, followed by the 180.00 region. A stronger extension would depend on whether buying pressure persists and the pair clears intervening resistance.
On the downside, a rejection near 178.00 could bring 177.00 back into focus. A deeper decline toward 176.00–176.50 would weaken the developing bullish structure and raise questions about whether the recent recovery has enough strength to continue.
What Could Influence EUR/JPY Beyond the Chart?
Technical patterns are only one part of the currency market. EUR/JPY is influenced by developments affecting both the euro and the Japanese yen, including monetary policy expectations, economic data, bond yields and broader investor sentiment.
Expectations surrounding the European Central Bank and the Bank of Japan can be particularly important. Changes in anticipated interest-rate differentials may influence demand for the pair, while shifts toward safer assets can sometimes support the yen and place downward pressure on EUR/JPY.
Economic releases and central-bank commentary can also trigger sharp moves that invalidate a chart pattern. Traders should therefore consider the economic calendar and current market conditions before interpreting a breakout as a reliable signal.
The screenshot alone does not establish the latest fundamental backdrop or confirm whether the projected move has subsequently occurred.
Confirmation Matters More Than the Projection
EUR/JPY is approaching a decision point on the four-hour timeframe. Its recovery from the October lows and rounded price structure provide a potential bullish scenario, but the area around 177.70–178.00 remains important for confirmation.
A sustained breakout could open the way toward higher resistance, while a rejection may leave the pair vulnerable to another pullback. Until price action confirms either direction, the formation should be treated as a developing technical setup rather than a completed reversal.
For traders, the practical priority is to watch how EUR/JPY behaves around resistance, identify where the bullish structure would be invalidated and manage risk accordingly. The upward arrow represents a possible scenario, not a guarantee of future price movement.
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