• EUR/JPY turns positive for the third straight day following a bearish gap amid a weaker JPY.
• Economic risks due to Iran tensions undermine the JPY, albeit intervention fears limit losses.
• The mixed technical setup further warrants caution before positioning for additional gains.

The EUR/JPY cross attracts fresh buyers following a bearish gap opening around the 183.80 region on Monday and extends the steady intraday ascent through the first half of the European session. Spot prices climb back closer to last week's swing high in the last hour, with bulls looking to build on the momentum further beyond the 185.00 psychological mark amid a broadly weaker Japanese Yen (JPY).

The JPY underperformance comes amid economic risks stemming from renewed US-Iran tensions and the continued disruption to energy supplies from the Strait of Hormuz. However, speculations that Japanese authorities will step in again to prop up the domestic currency, along with the Bank of Japan's (BoJ) hawkish outlook, might hold back the JPY bears from placing aggressive bets. This, in turn, might keep a lid on any meaningful upside for the EUR/JPY cross amid a mixed technical setup.

The recent breakdown below the 200-period Simple Moving Average (SMA) was seen as a key trigger for bearish traders, albeit the subsequent fall stalled near the 182.00 round figure. The EUR/JPY cross has recovered from recent lows, and short-term momentum is constructive, with the Relative Strength Index (RSI) hovering near 62 and the Moving Average Convergence Divergence (MACD) holding in positive territory, yet the inability to reclaim the 200-period SMA suggests rallies remain vulnerable.

Meanwhile, the 200-period SMA at 185.40 defined the initial resistance, and a sustained break above this level would be needed to ease the current bearish bias and open the way to higher highs. On the downside, the absence of nearby mapped supports leaves the focus on intraday swing lows as the next reference points, with any rejection from 185.40 likely to trigger fresh selling pressure back toward the recent swing low, around the 182.00 round figure.

(The technical analysis of this story was written with the help of an AI tool.)

EUR/JPY 4-hour chart