EUR\/JPY fell for a second day and traded near 183.00 in early European hours on Friday. The daily chart shows a bearish near-term tone, with price held below the nine-period and 50-period Exponential Moving Averages (EMAs).<\/p>\n
The pair has pulled back from recent highs, and the 14-day Relative Strength Index (RSI) is 40.9. This points to downside pressure, without reaching oversold levels.<\/p>\n
Support is seen near 181.87, the 10-week low set on March 16. The next level is 180.81, a near five-month low from February 12.<\/p>\n
Resistance sits at the 50-day EMA of 184.97, then the nine-day EMA at 185.59. A move above both averages could shift the near-term tone higher and open a test of 187.95, the all-time high from April 17.<\/p>\n
An AI tool was used to help write the technical analysis section.<\/p>\n
Given the bearish short-term outlook for EUR\/JPY, we see the cross is trading below key moving averages, signaling weakness. With the RSI at 40.9, there appears to be more room for a downward move before conditions become oversold. This suggests that initiating bearish positions could be a prudent strategy in the coming days.<\/p>\n
For traders using options, buying put options with a strike price near the 10-week low of 181.87 could be an effective way to play this expected decline. This strategy offers a defined risk while allowing for profit if the pair continues its descent toward the five-month low of 180.81. The premium paid for the option would be the maximum potential loss on the trade.<\/p>\n
This technical view is supported by fundamental factors, as recent data from Destatis showed German industrial production unexpectedly fell by 0.5% in March, raising concerns about the Eurozone’s economic engine. Meanwhile, comments from Bank of Japan officials hint at a potential hawkish pivot, with April’s core inflation in Tokyo hitting 2.3%, slightly above expectations. This policy divergence is adding to the downward pressure on the EUR\/JPY cross.<\/p>\n
We remember the sharp JPY appreciation in late 2025 when global growth fears surfaced, pushing this cross down significantly in a short period. The current setup feels familiar, though the drivers are more focused on domestic policy divergence. The market seems to be pricing in a less accommodative Bank of Japan, which historically strengthens the yen.<\/p>\n
However, we should stay disciplined and watch the key resistance levels closely. A move above the 50-day EMA at 184.97 would be our first signal that this bearish momentum is fading. Traders could place stop-loss orders just above this level to manage risk on any short positions.<\/p>\n
If the cross reclaims those moving averages, we could consider buying call options with strikes around 186.00 to target a retest of the April high near 187.95. This would represent a significant reversal of the current trend. Such a move would invalidate the immediate bearish case and signal that buyers have regained control.<\/p>\n
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