EURJPY Stalls at Range Highs as Traders Eye ECB & BoJ Signals

Technical Analysis

EURJPY is consolidating between 171.50 and 172.50, with momentum tilting slightly bullish. A breakout above 173.00 could extend toward 173.50–175.00, the upper boundary of the rising channel. On the downside, initial support rests at 171.50, followed by a deeper cushion at 170.45–170.00. Overbought stochastic readings warn that repeated tests of 172.00–172.50 may be losing steam, leaving the pair vulnerable to a corrective pullback.

Fundamental Factors Affecting the Pair

The Bank of Japan’s ongoing dovish stance pressures the yen, reinforcing broader risk-on flows into higher-yielding currencies like the euro. Meanwhile, the euro awaits cues from ECB President Lagarde’s remarks, which could influence policy expectations. Broader global sentiment—particularly equity performance and risk appetite—continues to play a role in directional bias.

1. Technical Structure & Momentum

EURJPY is currently consolidating within a 171.5–172.5 range. Momentum remains neutral to cautiously bullish. A break above 173.00 could test 173.50 and even the recent channel resistance near 175.00, signaling continuation of the broader uptrend. If downside pressure mounts, support zones at 171.50 and 170.45–170.00 may hold the key to stabilizing the pair.

2. Macro & Risk Sentiment

The pair is enjoying tailwinds from a weaker yen, driven by persistent Bank of Japan dovishness and broad risk-on sentiment. A speech by ECB’s Lagarde is also expected to provide further directional clues.

3. Technical Caveats

Repeated testing of 172.00–172.50 may be losing bullish momentum—stochastic indicators point to overbought conditions and a possible correction toward 170–170.5.

Summary

EURJPY remains range-bound between 171.5 and 173.0. A sustainable breakout above 173.0 could propel a move toward 175.0, while failure may see the pair pull back toward 170.0. Key factors to watch include ECB signals, BoJ policy nuance, and global risk appetite for the next directional shift.

EURJPY H3 Timeframe

On this EURJPY H3 chart:

Price advanced strongly, respecting a rising trendline before peaking at the 0.0% Fibonacci level. From there, bearish momentum stepped in, breaking below the red ascending trendline and driving price into deeper Fibonacci retracement zones.

Currently, price is hovering around the 171.30 level, close to the 50%–61.8% retracement area. This zone acts as a battleground between buyers looking for a rebound and sellers pressing for a lower continuation.

Key confluences strengthening the bullish rebound outlook:

• Price reacted at the 61.8% retracement zone, often called the “golden pocket.”
• Multiple demand zones marked below (170.90 & 170.40) align with Fib levels and rising trendline support.
• Black arrows on the chart project potential bullish continuation from these demand areas.
• The previous impulsive bullish leg suggests buyers may defend this structure.

Direction: Bullish

Target- 173.102

Invalidation- 169.697

CONCLUSION

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