EUR/JPY – Bullish Flag Breakout with Continuation Potential (30-Min Chart)
Instrument: EUR/JPY (Euro / Japanese Yen)
Timeframe: 30-Minute
Date: May 7, 2025
Chart Pattern: Bullish Flag
Trend Bias: Bullish Continuation
🔍 Market Context:
The EUR/JPY pair recently shifted from a downtrend into a short-term bullish reversal, as seen by a sharp impulse leg upward. Following this rally, price action entered a consolidation phase, forming a textbook bullish flag pattern — a continuation setup that typically signals further upside after a breakout.
🧩 Technical Pattern Breakdown:
✅ Bullish Flag Structure
Flagpole: The strong bullish move from the support zone near 162.038 formed the foundation of the flagpole.
Flag: A tight, downward-sloping consolidation formed shortly after hitting resistance around 163.198. This flag formation shows controlled profit-taking and market hesitation, not aggressive selling.
Breakout Point: Price is in the process of breaking out (or has already broken out) above the flag's upper resistance line, indicating renewed bullish interest.
📌 Key Technical Levels:
🔹 Support Zone:
Around 162.038, identified as a previous resistance-turned-support and the base of the recent bullish run.
This level is also aligned with the stop-loss (SL) for this setup, protecting the trade below the consolidation structure.
🔹 Resistance & Breakout Zone:
The horizontal resistance at 163.198 was tested multiple times during consolidation.
The breakout above this level now validates the bullish flag and suggests a continuation move.
🎯 Take-Profit (TP) Levels:
TP1: 163.198 – conservative target at the breakout level for initial profits.
TP2 / Final Target: 163.858 – derived from the measured move of the flagpole added to the breakout level. This is the full flag breakout projection.
🧠 Trade Setup & Rationale:
Entry:
On confirmed breakout above 163.198, or
On a successful retest of the broken flag resistance (now support).
Stop Loss (SL):
Below 162.038, outside the flag pattern and support zone, to avoid premature stop-outs on minor pullbacks.
Risk-to-Reward Ratio:
Highly favorable due to tight stop-loss and clearly defined upside potential.
Approximate R:R = 1:2 or better depending on entry.
Market Sentiment:
A shift from bearish to bullish is evident. Buyers are in control as long as price sustains above 162.700 and especially above 163.198.
📈 Projected Price Action Path:
Price breaks out of the flag structure and briefly tests the previous resistance at 163.198.
A bounce from this level confirms support and triggers a continuation move.
Target zone at 163.858 is likely to be reached if momentum holds.
🧾 Conclusion:
This EUR/JPY chart presents a high-probability bullish continuation setup. The presence of a clean bullish flag pattern, a well-formed breakout structure, and strong preceding momentum makes this a technically sound long trade. With tight risk management and strong upside projection, this trade aligns with smart trend-following strategy principles.
Instrument: EUR/JPY (Euro / Japanese Yen)
Timeframe: 30-Minute
Date: May 7, 2025
Chart Pattern: Bullish Flag
Trend Bias: Bullish Continuation
🔍 Market Context:
The EUR/JPY pair recently shifted from a downtrend into a short-term bullish reversal, as seen by a sharp impulse leg upward. Following this rally, price action entered a consolidation phase, forming a textbook bullish flag pattern — a continuation setup that typically signals further upside after a breakout.
🧩 Technical Pattern Breakdown:
✅ Bullish Flag Structure
Flagpole: The strong bullish move from the support zone near 162.038 formed the foundation of the flagpole.
Flag: A tight, downward-sloping consolidation formed shortly after hitting resistance around 163.198. This flag formation shows controlled profit-taking and market hesitation, not aggressive selling.
Breakout Point: Price is in the process of breaking out (or has already broken out) above the flag's upper resistance line, indicating renewed bullish interest.
📌 Key Technical Levels:
🔹 Support Zone:
Around 162.038, identified as a previous resistance-turned-support and the base of the recent bullish run.
This level is also aligned with the stop-loss (SL) for this setup, protecting the trade below the consolidation structure.
🔹 Resistance & Breakout Zone:
The horizontal resistance at 163.198 was tested multiple times during consolidation.
The breakout above this level now validates the bullish flag and suggests a continuation move.
🎯 Take-Profit (TP) Levels:
TP1: 163.198 – conservative target at the breakout level for initial profits.
TP2 / Final Target: 163.858 – derived from the measured move of the flagpole added to the breakout level. This is the full flag breakout projection.
🧠 Trade Setup & Rationale:
Entry:
On confirmed breakout above 163.198, or
On a successful retest of the broken flag resistance (now support).
Stop Loss (SL):
Below 162.038, outside the flag pattern and support zone, to avoid premature stop-outs on minor pullbacks.
Risk-to-Reward Ratio:
Highly favorable due to tight stop-loss and clearly defined upside potential.
Approximate R:R = 1:2 or better depending on entry.
Market Sentiment:
A shift from bearish to bullish is evident. Buyers are in control as long as price sustains above 162.700 and especially above 163.198.
📈 Projected Price Action Path:
Price breaks out of the flag structure and briefly tests the previous resistance at 163.198.
A bounce from this level confirms support and triggers a continuation move.
Target zone at 163.858 is likely to be reached if momentum holds.
🧾 Conclusion:
This EUR/JPY chart presents a high-probability bullish continuation setup. The presence of a clean bullish flag pattern, a well-formed breakout structure, and strong preceding momentum makes this a technically sound long trade. With tight risk management and strong upside projection, this trade aligns with smart trend-following strategy principles.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.