EUR/JPY was flat near 184.35 in early European trade on Tuesday. Geopolitical tensions between the US and Iran may support the Japanese Yen and limit gains.
The Euro may be supported by a hawkish ECB stance. Markets are pricing in 2–3 rate rises for 2026 due to energy-driven inflation, compared with earlier expectations for steady rates.
Daily Chart Signal Check
On the daily chart, the pair remains mildly bullish while holding above the rising 100-day EMA near 182.10. It is also above the Bollinger middle band around 183.70, with RSI at 55.22 and trending higher.
Support is seen at 183.70, then 183.00, with deeper support at the 100-day EMA near 182.10. Resistance stands at 185.80, with a further level near 186.30 if price breaks higher.
The EUR/JPY is holding firm around 184.35, but we see a clear tug-of-war. The European Central Bank’s tough talk is supporting the Euro, while geopolitical risks are giving the Yen some safe-haven appeal. This creates a tense balance for the coming weeks.
We are watching the ECB closely, especially after last week’s data showed Eurozone inflation hitting 3.1%, well above the 2% target. Markets are now firmly expecting at least two more rate hikes this year, making it risky to bet against the Euro. Selling out-of-the-money puts with strikes near the 183.00 support level could be a way to collect premium from this underlying strength.
Managing Event Risk
However, the recent naval friction near the Strait of Hormuz is a real concern that could boost the Yen without warning. This uncertainty is visible in the options market, where one-month implied volatility has jumped to 9.5% from 8% last week. For those already long, buying protective puts for the May expiration could be a prudent hedge against a sudden downturn.
The technical picture still looks bullish as long as we hold above the 183.70 level. We remember how the cross dipped on similar geopolitical news in late 2025 before resuming its uptrend. A bull call spread, buying the 184.50 call and selling the 186.00 call, offers a defined-risk way to profit if the pair grinds higher toward resistance.
