The EUR/JPY cross continues to show resilience in the currency market, maintaining its position above the key 172.00 handle and strengthening its bullish technical outlook. On Friday, the pair scaled higher for the second consecutive session, supported by a broadly weaker Japanese Yen (JPY) as market participants remain uncertain about the Bank of Japan’s (BoJ) next policy move. 

While spot prices briefly tested above the mid-172.00s, the pair has yet to generate strong follow-through momentum, signaling that traders remain cautious despite the encouraging uptrend structure. ProDivia Group broker Harvey Ross provides readers with a clear, detailed look at the topic.

Yen Weakness Supports EUR/JPY Gains

The Japanese Yen has been weighed down by uncertainty regarding the timing of the next BoJ rate hike. Traders are increasingly questioning whether the central bank will move aggressively or adopt a more measured tightening stance. 

This indecision has left the JPY vulnerable across major crosses, allowing the Euro (EUR) to consolidate its advantage. As a result, EUR/JPY buyers stepped back into the market, extending the recovery from recent pullbacks and bolstering the pair’s positive trajectory.

Technical Setup Favors EUR/JPY Bulls

From a technical analysis standpoint, the EUR/JPY cross continues to exhibit a bullish setup. The repeated rebounds from the 200-period Exponential Moving Average (EMA) on the 4-hour chart have reinforced the currency pair’s underlying strength. 

This EMA has consistently acted as a dynamic support level, preventing deeper retracements and maintaining the overall uptrend bias.

At the same time, momentum oscillators on both the hourly and daily timeframes remain in positive territory, suggesting that buyers maintain control. The combination of supportive moving averages and favorable oscillator signals underscores that the path of least resistance remains to the upside.

Key Resistance Levels to Watch

To confirm further bullish traction, EUR/JPY needs a decisive break above the 172.70 region, which represents the weekly high. Such a move would validate the constructive outlook and potentially trigger a wave of follow-through buying interest.

• 173.00 zone: A near-term target that aligns with the monthly peak, offering the first upside checkpoint once 172.70 is cleared.
• 173.60 barrier: Serves as an intermediate resistance level that could cap the immediate rally.
• 174.00 neighborhood: Represents a critical one-year high first touched in July, making it a significant milestone for bullish traders.
• 174.50 resistance: A subsequent ceiling, with potential to attract profit-taking if tested.
• 175.00 psychological mark: A major round number, closely followed by the July 2024 swing high at 175.40-175.45, which could act as the final resistance in the near-term bullish scenario.

A sustained breakout through these resistance zones would solidify the EUR/JPY bullish narrative and reinforce expectations of further appreciation.

Downside Risks Remain Limited

On the flip side, the 172.00 level acts as the first meaningful support. A pullback beneath this handle may invite fresh buyers near the 171.50 horizontal base, where dip demand has repeatedly emerged. This zone is reinforced by the 200-period Simple Moving Average (SMA) on the 4-hour chart, currently located around the 171.25 region.

As long as spot prices hold above this dynamic support cluster, the downside remains contained and likely to be seen as a buy-the-dip opportunity. However, a decisive break below 171.00 would invalidate the constructive chart setup and shift the near-term bias in favor of EUR/JPY bears. 

In such a scenario, traders could anticipate deeper retracements, undermining the current positive momentum.

Broader acro context

The outlook for EUR/JPY is also influenced by broader monetary policy divergence. The European Central Bank (ECB), while signaling caution, has not indicated imminent easing, keeping the EUR relatively well-supported. 

Conversely, the BoJ continues to struggle with its policy normalization path, leaving the JPY vulnerable to external shocks.

Global risk sentiment also plays a role. Equity market stability and higher yields in Europe tend to reduce safe-haven demand for the JPY, while supporting EUR demand. Unless the BoJ signals a decisive tightening move or risk-off flows emerge, the EUR/JPY cross is likely to remain well-bid.

Conclusion

The EUR/JPY price forecast remains constructive as the pair holds comfortably above the 172.00 support level. The technical structure favors the bulls, with repeated rebounds from key moving averages and positive oscillator signals underscoring the strength of the uptrend. 

A break above the 172.70 weekly high could pave the way toward 173.00, 174.00, and potentially the 175.00 psychological barrier.

Downside risks appear limited, with strong support in the 171.50–171.25 region. Unless the pair collapses below the 171.00 round figure, the overall EUR/JPY bullish outlook remains intact. For traders, the strategy continues to favor buying on dips and targeting higher resistance levels as the cross consolidates its upward momentum.