• EUR/JPY softens to around 183.55 in Thursday’s early European session. 
• Iran escalates attacks on infrastructure and transport networks across the Gulf, boosting the Japanese Yen. 
• Bullish tone for the cross remains intact, but further consolidation cannot be ruled out amid neutral RSI momentum. 
• The initial support level is located at 183.10; the immediate resistance to watch is 184.90. 

The EUR/JPY cross loses ground to near 183.55 during the early European session on Thursday, pressured by safe-haven flows. NBC News reported that Iran has launched its “most intense operation since the beginning of the war,” firing some of its most advanced ballistic missiles toward Tel Aviv and Haifa in Israel. Oman has evacuated all vessels from its key oil export terminal at Mina Al Fahal as a precautionary measure. 

Ongoing tensions in the Middle East and fears of a prolonged war could boost the safe-haven flows, supporting the Japanese Yen (JPY) and creating a headwind for the cross. 

On the Euro front, the European Central Bank (ECB) policymaker Isabel Schnabel said on Wednesday that new quarterly forecasts will partly incorporate the economic impact of the war in Iran. Meanwhile, ECB Governing Council member Peter Kazimir stated that a rate hike may be closer than thought, and the central bank could act if the war raises inflation expectations.

Traders have increased pricing for ECB rate hikes after hawkish comments from central bank members. Swaps pricing indicates markets expect the ECB to tighten monetary policy faster than previously thought. The European Central Bank is now seen hiking as soon as June, according to LSEG data.

Technical Analysis:

In the daily chart, the near-term bias of EUR/JPY is mildly bullish as price holds well above the rising 100-day exponential moving average near 181.40, keeping the broader uptrend intact despite the recent pause under the upper Bollinger Band. The pair has retreated from the upper band area, but price still rides the upper half of the Bollinger envelope, indicating sustained demand rather than a full loss of momentum. The RSI at 51 shows balanced conditions after unwinding overbought pressures seen in early February, suggesting consolidation within an ongoing upward structure rather than a completed top.

Immediate support emerges at the mid-Bollinger band and recent congestion zone around 183.10, with a break exposing stronger downside protection near 182.10, where the lower band begins to steepen above the 100-day EMA. Below that, the 181.40 region aligns with the long-term average and marks pivotal trend support. On the topside, initial resistance stands near 184.90, defined by the recent upper Bollinger Band cap, followed by the February high in the 185.70 area.  

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