EURJPY Analysis The EUR/JPY pair has recently been range-bound after falling to 158.14 last week. Strong recoveries from these lows suggest that buyers remain active, but the pair faces significant resistance at the 163.00 level. The region has repeatedly resisted price attempts to rally, effectively limiting the upward momentum in the near term. Despite these setbacks, the overall technical picture is not entirely negative, and there have been some encouraging developments for euro supporters. This is especially important in light of the upcoming interest rate decision by the European Central Bank. One of the most promising signals on the chart is the bullish crossover between the 20-day SMA and the 200-day SMA, which has occurred for the first time since December 2023. These crossovers often indicate a positive change in momentum and may indicate a medium-term trend is turning to the upside. Furthermore, the EUR/JPY pair appears to be following a rising price channel that has been in place since February, suggesting that the overall bullish structure will remain intact as long as the channel boundaries hold. If buying interest increases, the pair is likely to attempt a move back up to the 162.60 level. A decisive move above this level would open the way for a test of the 164.20 area. This area is important not only psychologically, but also because it coincides with the 50% Fibonacci retracement of the long-term trend from December to July. A break above this midpoint correction could trigger bullish sentiment and send the pair back to the October high of 166.67. The 38.2% Fibonacci level above 166.90 could pose another hurdle, but continued upward pressure could push the price towards the upper boundary of the channel, climbing to 167.90. A break above this level could target the 169.20 area, which has served as a limit to previous uptrends. On the other hand, there are a few support levels that could curtail any short-term declines. First, we have the 200-day simple moving average and the 61.8% Fibonacci retracement confluence, both located at the 161.65 area. These technical indicators often act as a magnet for price guidance and can provide a base for recovery when a downtrend is imminent. Just below this, the 160.60 level previously acted as a strong resistance level, but is now supported by the nearby 50-day simple moving average and could become a support level that could act as another hurdle. This area could play a key role in determining whether the currency pair is able to maintain its current structure or if a major correction is imminent. However, the most notable level in the downtrend is 159.70, which is an uptrend support line. A drop below this line could indicate a breakdown of the ascending channel pattern and signal a change in sentiment. If this support fails to hold, the pair could fall to its recent lows and a key turning point at 158.00. Further weakness could lead to the next major support level at 156.00. This level has not been tested for several months and is likely to attract the attention of market participants in the long term. Investors remain cautious amid expectations for interest rate decisions from the European Central Bank. The market is widely expecting a 25 basis point rate cut, but attention will remain on what happens next. Given the broad economic uncertainty and mixed inflation signals in the Eurozone, it is likely that the European Central Bank will opt for a data-led approach to future monetary policy rather than committing to a clear easing cycle. This uncertainty could once again lead to volatility in the EUR/JPY pair, especially if the central bank’s messages diverge from investor expectations. In conclusion, the EUR/JPY pair currently lacks a clear trend and continues to fluctuate within a clearly defined range. However, key technical levels are indicating a bullish breakout. Bulls are trying to resume the uptrend by breaking the 164.20 resistance level, while bears are targeting the 159.70 level, which could be an entry point for further losses. If none of these areas subside, the currency pair will continue to rise due to general risk sentiment, central bank policy signals, and new geopolitical factors.
