Insights 
VT 
The EUR/JPY pair is poised to approach its all-time high of 178.82. The Relative Strength Index remains above 50, supporting a bullish outlook. Initial support is pegged at 178.00, and the pair is trading above the nine-day EMA.
Currently around 178.10, EUR/JPY is up over 0.25% during early European trading hours on Monday. If it surpasses 178.82, the pair could target the psychological level of 180.00. On the downside, immediate support is at 178.00, followed by the nine-day EMA at 177.33.
Break Below Key Levels
A break below the nine-day EMA could test the ascending trendline at 176.40 and the 50-day EMA at 175.39. Falling below this zone may lead to bearish pressure, taking EUR/JPY towards the two-month low of 172.14, noted on September 9.
The Euro saw the largest gain against the Japanese Yen, showing a positive change of 0.39%. Other currencies like the US Dollar showed minimal movement against the Euro, while the New Zealand Dollar rose 0.10% against it, and the Swiss Franc fell 0.07%.
The heat map illustrates percentage shifts in major currency pairs, with the base currency chosen from the left column and the quote currency from the top row.
Strong Upward Momentum
The EUR/JPY cross is showing strong upward momentum, positioning itself to challenge the record high of 178.82 set just last month in October 2025. This strength is largely driven by the policy gap between the European Central Bank and the Bank of Japan. We’ve seen Eurozone inflation data for October come in at 2.8%, keeping the ECB on a hawkish path while the BoJ remains committed to its stimulus.
Given the bullish technical indicators like the RSI remaining above 50, we see traders positioning for a move towards the 180.00 psychological barrier. Buying call options with strike prices at 179.00 or 180.00 for December 2025 or January 2026 expirations could be a direct way to play this expected advance. This strategy allows for capitalizing on upward movement beyond the all-time highs.
However, we must watch the immediate support at the 178.00 level very closely. A break below the nine-day EMA at 177.33 would signal a potential loss of momentum and could be a trigger for protective strategies. This might involve purchasing put options with a strike price around 177.00 to hedge existing long positions against a sharp reversal.
It’s important to remember that the current levels are significant, having finally broken past the peaks we last saw way back in 2008. This breakout after more than a decade suggests a powerful new trend is in place. The continued weakness in the yen is also supported by recent data showing Japan’s Q3 GDP contracted by 0.2%, reinforcing the fundamental divergence.
With the pair trading at record highs, we can expect increased volatility, which will make options more expensive. To manage these higher costs, traders could consider using bull call spreads. This involves buying a call at a lower strike price and selling one at a higher strike, capping potential gains but significantly reducing the initial premium paid.
