Key Moments
- EUR/JPY traded around 184.95 in early European dealings on Thursday, posting modest losses while staying near recent highs.
- Eurozone HICP inflation eased to 2.8% YoY in June from 3.2% in May, coming in below the 3.0% consensus forecast.
- Immediate resistance sits at 185.00, with initial technical support clustered around 184.90 and the 100-day moving average at 184.65.
Euro Softens Against Yen as Inflation Cools
EUR/JPY was under slight pressure around 184.95 in early European trading on Thursday, slipping on the session but retaining a constructive short-term bias. The move came after Eurozone inflation data showed a larger-than-expected moderation, potentially easing the need for further near-term tightening by the European Central Bank (ECB) and weighing on the Euro (EUR) relative to the Japanese Yen (JPY).
Figures published by Eurostat on Wednesday indicated that Eurozone inflation, measured by the Harmonized Index of Consumer Prices (HICP), fell to 2.8% year-on-year in June from 3.2% in May. The reading undershot expectations for a 3.0% print.
Morgan Stanley economists said softer Eurozone June inflation could also “lower the bar a touch for the ECB to be on hold in September,” adding that energy pressures likely had a “limited” direct impact on eurozone prices.
Following Wednesday’s print, traders continued to anticipate the ECB to deliver another quarter-point rate rise by the end of this year, according to Morningstar.
EUR/JPY Technical Picture: Bullish Tone Amid Consolidation Risk
On the daily chart, EUR/JPY continues to trade above the middle line of the Bollinger Bands and the 100-day moving average, preserving a mildly bullish short-term profile as the pair hovers near recent highs. The Relative Strength Index (14) is situated around the 50 level, signaling neutral momentum and pointing to the likelihood of continued range-bound, gradual gains rather than a forceful breakout.
| EUR/JPY Technical Levels | Level | Comment |
|---|---|---|
| Immediate resistance | 185.00 | Psychological barrier on the topside |
| Next resistance | 185.86 | June 30 high |
| Further resistance | 186.15 | Upper Bollinger Band, potential profit-taking area |
| Initial support | 184.90 | Middle Bollinger Band |
| Secondary support | 184.65 | 100-day moving average |
| Deeper support | 183.65 | Lower Bollinger Band |
On the upside, the first notable resistance is the 185.00 psychological handle. A move through this area would bring the June 30 peak at 185.86 into focus, followed by the upper Bollinger Band near 186.15, where buying interest could encounter profit-taking.
On the downside, initial support aligns with the middle Bollinger Band around 184.90. Below this, the 100-day moving average at 184.65 represents the next key floor, while a more pronounced retreat would open the way toward the lower Bollinger Band support around 183.65.
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