FX.co ★ MMC | EUR/JPY

EURJPY Analysis The EUR/JPY pair is trading near 161.94 and is facing strong resistance at the downtrend line formed by the previous high. Price action suggests that the pair has made several breakout attempts, but has so far failed to maintain the momentum needed to overcome this key hurdle. If buyers can decisively break this resistance, the next upside target should be around 163.30, followed by a test of 164.50. The downside risk is that if the high is not broken, a retest of the 160.50 level could occur, which coincides with the short-term moving average and the previous consolidation zone. A sharp correction would expose the 158.00-157.50 demand zone, where the price is currently finding strong support. Technical indicators point to a difficult situation. The Relative Strength Index (RSI) is hovering near the neutral zone at 55.81, which clearly shows a lack of momentum. The Stochastic Oscillator is hovering around its average value, which indicates that buyers and sellers are not in full control of the situation at the moment. The Bollinger Bands have narrowed slightly, indicating a decrease in volatility, but any further widening could lead to a breakout or a significant decline. The price remains bullish and above the key moving averages, but the downtrend line is still limiting the upside and a breakout confirmation is needed before establishing a bullish bias. In general, the euro reacts sensitively to the policy decisions of the European Central Bank, while the yen depends on market sentiment and the intervention of the Bank of Japan. The European Central Bank’s cautious stance on interest rate adjustments continues to weigh on the demand for the euro, while the yen is becoming more volatile amid speculation of a possible change in monetary policy. Risk appetite also plays a role, with the EUR/JPY pair acting as a barometer of global investor sentiment. A shift to safe-haven assets could benefit gains and put additional downside pressure on the currency pair. Meanwhile, the euro is rising as risk appetite and yield spreads remain strong. The future performance of the EUR/JPY pair is expected to be influenced by upcoming economic data, including Eurozone inflation data and updates on Japanese monetary policy. Deviations from expectations can lead to volatility, so traders should keep a close eye on these trends. If inflationary pressures in the Eurozone persist, speculation of a delay in interest rate hikes by the European Central Bank could support the euro. Conversely, any signs of intervention by Japanese politicians could further strengthen the yen and limit the upside potential of the EUR/JPY pair. A break above the downtrend line indicates a continuation of the bullish trend and is likely to target higher resistance levels in the coming sessions. However, if the price fails to break this level, fresh downward pressure is likely, with the first support located around 160.50. A clear break below this level is likely to accelerate the selling momentum and create a significant demand zone near the 158.00 level. The market has reached a critical juncture and the price increase is determining the next major move. Traders should look for confirmation signals and confirm the validity of the current trend and fundamentals before entering any trades.