EUR/JPY Weekly Technical Analysis – Double Bottom Reversal and Bullish Continuation Setup
🔍 1. Market Context & Overview
The EUR/JPY pair has been in a long-term bullish trend since mid-2020, with strong upward momentum periodically interrupted by correction phases. The pair recently underwent a significant pullback from a major resistance zone (~170.500), which provided a healthy retracement, allowing institutional buyers to reaccumulate positions at discounted levels.
On the weekly timeframe, a double bottom formation has emerged, indicating the potential completion of a corrective phase and a possible resumption of the broader bullish trend.
📊 2. Technical Structure Breakdown
✅ Pattern: Double Bottom (Reversal Pattern)
A double bottom is a bullish reversal pattern that occurs after a downtrend. It consists of two nearly equal lows separated by a moderate peak (neckline). This structure indicates that the market has found strong support and rejected further downside twice, suggesting seller exhaustion and buyer strength.
Bottom 1: Formed around 154.600, a strong historical support level.
Bottom 2: Reconfirmed the same support area, showing market consensus that this is a fair value area for EUR/JPY.
Neckline: Established near 170.570, which also coincides with a key supply zone and a previously failed breakout.
This pattern suggests a trend reversal from the recent bearish correction back to the prevailing bullish trend.
📐 3. Key Price Levels & Zones
Support Zone: 154.600 – Strong demand zone where both bottoms formed.
Neckline / Resistance: 170.570 – Major structure level. A confirmed breakout here confirms the double bottom.
Take Profit (TP) Target: 175.710 – Derived using the measured move technique (height of the pattern projected from the breakout).
Stop Loss (SL): Below 154.600 – Invalidates the pattern if breached, indicating further downside potential.
⚙️ 4. Entry & Execution Plan
This setup offers an ideal swing trading opportunity, focusing on a break-retest-continuation model.
📈 Entry Trigger:
Break and close above 170.570 on the weekly timeframe
Retest of the breakout zone (old resistance becomes new support)
🎯 Profit Target:
175.710 is the projected target based on the height of the pattern (approx. 16 points), aligned with historical resistance levels.
🛑 Stop Loss Placement:
Below 154.600, ideally 1–2 ATR below the structure to account for volatility.
Ensures the trade is invalidated if the pattern fails.
💰 Risk/Reward Ratio:
With an entry at ~170.570, TP at 175.710, and SL at 154.600, this gives an R:R of approximately 2.5:1 to 3:1, which is excellent for a swing setup.
🧭 5. Multi-Timeframe Confluence
Weekly Timeframe: Shows the overall structure and confirmation of the pattern.
Daily Timeframe: Can be used for entry refinement—look for bullish breakouts, candlestick confirmations (e.g., bullish engulfing, breakout-retest).
4H Timeframe: Ideal for early entries after the neckline breakout and retest.
🧠 6. Psychology Behind the Pattern
The first bottom reflects strong buying interest at support.
The second bottom confirms that sellers failed to push price lower—a sign of weakening bearish control.
The neckline breakout activates aggressive buying and stops out late sellers, adding momentum.
Smart money often accumulates in these zones, causing explosive follow-through post-breakout.
📌 7. Trading Plan Summary
Component Details
Pattern Double Bottom (Reversal)
Timeframe Weekly
Bias Bullish
Entry Trigger Break and retest of 170.570
TP Target 175.710
SL (Invalidation) Below 154.600
Risk/Reward 2.5:1 to 3:1
Trade Type Swing / Position Trade
Confluence Factors Market structure, price action, key levels
⚠️ 8. Risk Management & Final Thoughts
Stick to a strict risk per trade model (1–2% max).
Use confirmation techniques: candle closes, volume spikes, divergence from momentum indicators.
Be prepared for potential false breakouts or extended consolidation at resistance—wait for a clean break + retest.
If the trade plays out, it could set the tone for multi-week upside continuation, in line with the broader trend.
✅ Conclusion
The EUR/JPY weekly chart presents a high-probability bullish reversal pattern, backed by clear structure, a well-respected support zone, and a clean resistance/neckline. With proper risk management and disciplined execution, this setup offers an attractive reward profile for swing and position traders alike.
🔍 1. Market Context & Overview
The EUR/JPY pair has been in a long-term bullish trend since mid-2020, with strong upward momentum periodically interrupted by correction phases. The pair recently underwent a significant pullback from a major resistance zone (~170.500), which provided a healthy retracement, allowing institutional buyers to reaccumulate positions at discounted levels.
On the weekly timeframe, a double bottom formation has emerged, indicating the potential completion of a corrective phase and a possible resumption of the broader bullish trend.
📊 2. Technical Structure Breakdown
✅ Pattern: Double Bottom (Reversal Pattern)
A double bottom is a bullish reversal pattern that occurs after a downtrend. It consists of two nearly equal lows separated by a moderate peak (neckline). This structure indicates that the market has found strong support and rejected further downside twice, suggesting seller exhaustion and buyer strength.
Bottom 1: Formed around 154.600, a strong historical support level.
Bottom 2: Reconfirmed the same support area, showing market consensus that this is a fair value area for EUR/JPY.
Neckline: Established near 170.570, which also coincides with a key supply zone and a previously failed breakout.
This pattern suggests a trend reversal from the recent bearish correction back to the prevailing bullish trend.
📐 3. Key Price Levels & Zones
Support Zone: 154.600 – Strong demand zone where both bottoms formed.
Neckline / Resistance: 170.570 – Major structure level. A confirmed breakout here confirms the double bottom.
Take Profit (TP) Target: 175.710 – Derived using the measured move technique (height of the pattern projected from the breakout).
Stop Loss (SL): Below 154.600 – Invalidates the pattern if breached, indicating further downside potential.
⚙️ 4. Entry & Execution Plan
This setup offers an ideal swing trading opportunity, focusing on a break-retest-continuation model.
📈 Entry Trigger:
Break and close above 170.570 on the weekly timeframe
Retest of the breakout zone (old resistance becomes new support)
🎯 Profit Target:
175.710 is the projected target based on the height of the pattern (approx. 16 points), aligned with historical resistance levels.
🛑 Stop Loss Placement:
Below 154.600, ideally 1–2 ATR below the structure to account for volatility.
Ensures the trade is invalidated if the pattern fails.
💰 Risk/Reward Ratio:
With an entry at ~170.570, TP at 175.710, and SL at 154.600, this gives an R:R of approximately 2.5:1 to 3:1, which is excellent for a swing setup.
🧭 5. Multi-Timeframe Confluence
Weekly Timeframe: Shows the overall structure and confirmation of the pattern.
Daily Timeframe: Can be used for entry refinement—look for bullish breakouts, candlestick confirmations (e.g., bullish engulfing, breakout-retest).
4H Timeframe: Ideal for early entries after the neckline breakout and retest.
🧠 6. Psychology Behind the Pattern
The first bottom reflects strong buying interest at support.
The second bottom confirms that sellers failed to push price lower—a sign of weakening bearish control.
The neckline breakout activates aggressive buying and stops out late sellers, adding momentum.
Smart money often accumulates in these zones, causing explosive follow-through post-breakout.
📌 7. Trading Plan Summary
Component Details
Pattern Double Bottom (Reversal)
Timeframe Weekly
Bias Bullish
Entry Trigger Break and retest of 170.570
TP Target 175.710
SL (Invalidation) Below 154.600
Risk/Reward 2.5:1 to 3:1
Trade Type Swing / Position Trade
Confluence Factors Market structure, price action, key levels
⚠️ 8. Risk Management & Final Thoughts
Stick to a strict risk per trade model (1–2% max).
Use confirmation techniques: candle closes, volume spikes, divergence from momentum indicators.
Be prepared for potential false breakouts or extended consolidation at resistance—wait for a clean break + retest.
If the trade plays out, it could set the tone for multi-week upside continuation, in line with the broader trend.
✅ Conclusion
The EUR/JPY weekly chart presents a high-probability bullish reversal pattern, backed by clear structure, a well-respected support zone, and a clean resistance/neckline. With proper risk management and disciplined execution, this setup offers an attractive reward profile for swing and position traders alike.
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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.