Momentum Remains Bullish
Momentum remains bullish after crossing the Ichimoku Cloud, with resistance at 171.09 and potential to test 172.00 if surpassed. On the downside, support lies at 169.25 and 168.45, identified as the July 1 swing low.
The Euro showed strength against major currencies this week, notably against the British Pound. The percentage changes in various pairs highlight the Euro’s positioning in the foreign exchange landscape.
We’re holding comfortably above the 170.00 handle in EUR/JPY, which in itself reflects how persistent the underlying buying pressure has been, despite this very mild pullback. It’s no coincidence the pair remains parked above the Ichimoku Cloud—a structure that tends to act as a momentum filter of sorts—showing that the broader direction of travel remains upward for now. The RSI edging closer to overbought territory does raise questions, though. Price may still push higher in the short term, but we ought to be alert to the increased likelihood of abrupt intraday reversals if overextension sets in.
The 171.09 marker continues to draw attention. That was previously a barrier for upside momentum, and any solid break through it could push us toward 172.00 rather swiftly—psychological round figures like that tend to act as magnet points once momentum starts building behind a move. If price does roll over instead, a slip below 170.00 could start to unwind some of the bullish structure that’s taken shape over the past week. From our perspective, that opens the door to re-tests of 169.25 and perhaps even 168.45, which was the key base from early July. That zone will likely become the first area of interest for those watching downside risks.
It’s not just price action, however. Context matters. Today’s dip might feel negligible at 0.11%, but with US markets offline for Independence Day, what we’re seeing is movement within a thinner book. That amplifies things—not because traders are reacting strongly, but because fewer are trading at all. It’s often better to keep reactions dampened in such a setting to avoid false signals creeping into the decision-making process.
Euro’s Cross Currency Strength
Looking back, the cross had undergone a steep descent earlier in H2, retreating from 175.42 to as low as 154.39 before this catchy rebound began to form. That historical move may have set the tone for what seems like a re-building of confidence in the pair. Importantly, prices pushing clear of the Ichimoku structure lend technical confirmation to the idea that this rebound has legs, so to speak. The 171.09 level continues to define short-term resistance. If taken out with conviction, there’s room to stretch toward 172.00—though timing and trade entry become trickier the higher RSI climbs.
Support levels to the south—first at 169.25 and then deeper at 168.45—remain technically intact. Traders typically treat these kinds of zones as guardrails, areas where buyers may re-enter, or at least where the pace of any decline could slow. As long as those hold firm, broader bullish patterns remain.
Elsewhere, the Euro’s recent show of strength has not been isolated to this pair. Its relative outperformance, especially against Sterling in recent sessions, adds weight to the rising tide beneath EUR/JPY. What we’re observing is less about Yen-specific drama and more about the Euro accumulating bids across the board. Percentage changes across separate pairs this week underscore that—price action tends to reflect broader cross-currency dynamics, not just single-pair trade.
We keep an eye on liquidity spills and broader rotation in the FX complex. Constructive tone in Euro cross-pairs continues to matter. Shorter-term derivative setups—those dependent on quick directional follow-through—will need tightly managed triggers. We’re wary of weekend gaps and thin Friday flows distorting signals. Those playing directional exposure would do well to wait for confirmation around key levels rather than pre-empt.
