EUR/JPY appreciates after opening at a bearish gap, remaining in negative territory and trading around 177.50 during Asian hours on Monday. Technical analysis of the daily chart shows the currency cross remains within a descending channel pattern, suggesting an ongoing bearish bias.
The EUR/JPY cross is maintaining a capped tone as it holds below the 50-day Exponential Moving Average (EMA). The pair is attempting to stabilize just above the nine-day EMA, suggesting short-term consolidation within a broader corrective phase, while the 14-day Relative Strength Index (RSI) around 41 hints at subdued momentum rather than a decisive recovery.
The EUR/JPY cross could test the immediate support at the nine-day EMA of 177.40, followed by the lower boundary of its descending channel around the 11-month low of 175.70, which was recorded in November 2025. If selling pressure intensifies and pushes the pair below this confluence support zone, further declines could expose the 14-month low at 169.72.
On the upside, the primary resistance lies at the 50-day EMA of 180.01. A move above the medium-term price average would cause a bullish reversal, opening the doors for the EUR/JPY cross to approach the upper boundary of the descending channel near 183.60, followed by the all-time high of 187.95, reached on April 17.
Analysts at MUFG highlight a further hawkish shift at the BoJ, noting that in Japan, Bank of Japan Board Member Junko Koeda has “reinforced the case for further tightening,” delivering what they describe as “a more explicit warning against excessive caution than in her previous speech.” They see her latest remarks as underscoring the central bank’s growing readiness to continue normalizing policy.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day.
EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy.
The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control.
Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall.
Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
