FX.co ★ EUR/JPY

EUR/JPY is trading near 176.15 on Friday, extending gains for a third straight session, and the pattern of this week tells you almost everything about where the two currencies stand relative to each other. The Bank of Japan held its benchmark rate unchanged at 1.25% as expected, and on paper the statement was a hawkish document. It confirmed that underlying inflation has reached the 2% target, with core CPI projections of 2.5% for 2026 and 2.7% for 2027, and it reaffirmed the bank's commitment to anchoring inflation near target. Any central bank projecting inflation above target for two consecutive years is not a central bank preparing to ease. But the market didn't trade the document; it traded the delivery. The BOJ attached explicit conditions to its next move, tying future decisions to developments in foreign exchange markets, artificial intelligence investment, and the Middle East. Governor Kazuo Ueda reinforced that framing in his press conference, and the yen slipped against major currencies almost immediately. The lesson is familiar: a genuinely hawkish outlook undercut by open-ended conditions is, in trading terms, not hawkish at all. Markets need a timeline they can price, and the BOJ declined to provide one. On the euro side, the data has been quietly constructive. Germany's import price index for September beat expectations, rising 2.1% month-on-month and 10.4% year-on-year, accelerating sharply from August's 1% and 8.3% readings. France followed the same trajectory, with CPI rebounding 0.4% in September after a 0.3% decline in August, and the annual rate climbing to 3.8% from 3.4%, comfortably above the 3.6% consensus. Those figures complicate the ECB's position. The central bank held rates steady on Thursday as anticipated, and President Christine Lagarde confirmed she will step down early, in February 2027, without a successor named. The ECB noted that energy prices continue pushing inflation up while dragging growth down, and added a detail worth weighing: financial conditions have tightened since the Governing Council's last meeting, which could pressure both inflation and growth. That cuts two ways, and the market's modest euro bid suggests traders are currently reading it as a reason for the ECB to stay patient rather than pivot. The net effect is a pair drifting sideways with a mild upward bias, neither currency strong enough to force a decisive break.

On the technical side, EUR/JPY is trading near 176.15, and the moving averages are arranged in a way that leans bearish on the medium horizon while leaving a thin foothold on the short one. On the H4 chart, the 50-period SMA sits at 176.35 while the 200-period SMA rests higher at 177.90. On the H1 chart, the 200-period SMA is at 176.40 and the 50-period SMA at 176.05. Read individually rather than as a block: the H1 50-period SMA at 176.05 is the only average beneath the market, roughly 10 pips below the current price, and it is the immediate dynamic floor; lose it, and the recovery loses its base. The H4 50-period SMA at 176.35 and the H1 200-period SMA at 176.40 converge within 5 pips of each other, and when two timeframes settle that closely, the market treats them as one reinforced resistance band rather than two separate hurdles. That 176.35–176.40 zone is the gate: a daily close above it would be the first genuine evidence the near-term downtrend is fracturing. Finally, the H4 200-period SMA at 177.90 sits well overhead as the broader structural ceiling, representing a full repair rather than a bounce. Horizontal support and resistance operate independently of those shifting averages, marking fixed price zones where buyers and sellers have previously committed capital. On the downside, initial support rests at 175.90, followed by 175.50, then the psychologically significant 175.00, with 174.50 marking a deeper demand area where buyers have appeared before. On the upside, resistance begins at 176.40, aligning with the H1 200-period SMA, then the 176.35–176.40 confluence itself, followed by 177.00 and then 177.50, with 177.90 waiting beyond as the H4 200-period average. If buyers hold above 176.05 and push through 176.40, the pair could extend toward 177.00 and potentially 177.50, and a daily close above the confluence would open the door to 177.90. If 176.05 gives way under sustained selling, expect a slide toward 175.90 and then 175.50, which would leave every average firmly overhead and keep the bearish structure intact.