The EUR/JPY currency pair strengthened to around 172.40 in Monday’s early European session, gaining 0.14% on the day as market sentiment improved. The cross maintains a constructive technical outlook, supported by the 100-day Exponential Moving Average (EMA), with the Relative Strength Index (RSI) confirming continued upside momentum.
Traders are closely watching the immediate resistance near 173.15 and the first support level at 171.12, as price action remains sensitive to macro developments, risk sentiment, and central bank commentary. The article from Primeber Group highlights every key aspect of this issue in detail, thanks to one of their brokers, Nicholas Jones.
EUR/JPY is trading on a positive note in the early European session, buoyed by improving risk appetite across global markets. The pair’s uptrend is reinforced by technical indicators, with the 100-day EMA acting as a key support level on the daily chart.
This level has historically functioned as a reliable trend indicator, and as long as the cross stays above it, the bullish bias is likely to remain intact. Meanwhile, the RSI, currently standing above the midline at 55.75, suggests that upward momentum remains robust and further gains could be anticipated.
EUR/JPY upside may encounter headwinds due to the Japanese Yen (JPY) following hawkish remarks from Bank of Japan (BoJ) Governor Kazuo Ueda. During a panel at the Federal Reserve’s annual Jackson Hole conference, Ueda emphasized that wages in Japan are likely to stay under upward pressure amid a tight labor market.
His statements suggest the possibility of future BoJ interest rate hikes, a development that could strengthen the JPY and limit the near-term EUR/JPY rally.
From a technical perspective, the constructive outlook for EUR/JPY remains intact. The cross’s position above the 100-day EMA indicates strong trend support, while the RSI above midline levels reinforces bullish momentum.
Traders are closely monitoring the first resistance level at 173.15, which aligns with the upper boundary of the Bollinger Band on the daily chart. A breakout above this level could pave the way toward the crucial resistance zone between 173.90 and 174.00, coinciding with the July 28 high and a psychologically significant round number.
The Bollinger Bands, which measure price volatility and potential reversal points, suggest that any sustained move above 173.15 would indicate strong upside pressure. Breaching the 173.90–174.00 resistance zone could confirm bullish continuation, attracting further speculative buying from technical traders and momentum-focused participants.
Additionally, a persistent move above these levels could signal a shift toward higher timeframe targets, potentially opening the door for testing levels not seen since mid-year.
On the downside, the bearish scenario is defined by the first support level at 171.12, which represents the low of August 20. A breach below this support could drag the cross toward 170.45, coinciding with the lower Bollinger Band and acting as a secondary support area.
A further decline could test 170.00, a round figure often watched by traders for psychological significance and potential buying interest. Such levels are critical for risk management, especially for short-term traders looking to protect gains or limit downside exposure.
Monitoring technical patterns alongside macroeconomic developments is essential for EUR/JPY traders. The cross’s near-term trajectory may be influenced by risk sentiment, BoJ policy signals, and global economic data releases, including European inflation figures, GDP updates, and US market trends.
Central bank commentary, particularly from the BoJ and the European Central Bank (ECB), remains a key driver of volatility in this pair.
For now, the constructive technical setup remains intact, with support firmly above the 100-day EMA and the RSI maintaining momentum-friendly levels. The first key resistance emerges at 173.15, while the next significant upside barrier lies in the 173.90–174.00 range.
On the downside, traders will focus on 171.12, followed by 170.45 and the psychologically important 170.00 level, which together provide a structured framework for trading decisions.
The interplay of technical indicators and macro factors will likely dictate EUR/JPY price action in the coming sessions. A bullish breakout above 173.15 could trigger additional momentum-driven buying, while a reversal toward 171.12 or lower could attract counter-trend traders seeking short-term opportunities.
Bollinger Bands, EMA support, and the RSI trend remain the most relevant tools for assessing near-term trend strength, potential reversal zones, and momentum sustainability.
In conclusion, EUR/JPY maintains a constructive outlook, trading near 172.40 in early European action, supported by the 100-day EMA and positive RSI momentum. The first upside barrier at 173.15 could set the stage for a run toward 173.90–174.00, while downside risk is limited to 171.12, 170.45, and 170.00. Traders should closely monitor BoJ commentary, risk sentiment, and technical levels to anticipate potential breakouts or pullbacks.
