EUR/JPY Price Forecast: Holds steady but maintains bullish bias above 100-day EMA support

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The EUR/JPY cross holds steady near 184.35 during the early European session on Tuesday. However, the potential upside for the cross might be limited as ongoing tensions between the United States (US) and Iran could boost a safe-haven currency such as the Japanese Yen (JPY).

EUR/JPY trades on a flat note around 184.35 in Tuesday’s early European session.
The cross keeps the positive vibe above the 100-day EMA, with bullish RSI momentum.
The initial support level is seen at 183.70; the first upside barrier emerges at 185.80.

On the other hand, the hawkish tone of the European Central Bank (ECB) could underpin the Euro (EUR) against the JPY. Markets are now pricing in 2–3 interest rate hikes for 2026 due to surging energy-driven inflation, a significant shift from previous expectations of holding rates.

Technical Analysis:

In the daily chart, the near-term bias of EUR/JPY is mildly bullish as price holds above the rising 100-day exponential moving average near 182.10 and continues to respect a sequence of higher closes over recent sessions. The pair also trades comfortably above the Bollinger middle band around 183.70, indicating that dips are being absorbed within an ongoing uptrend rather than signalling a reversal. RSI at 55.22 stays above its midline and trends higher, confirming positive momentum but without overbought conditions.

Initial support emerges at the Bollinger middle band around 183.70, followed by the psychological 183.00 area, while the 100-day EMA near 182.10 forms a deeper support level that underpins the broader bullish structure. On the topside, immediate resistance sits near the recent upper-Bollinger proximity around 185.80, with a sustained break opening room toward the 186.30 region. As long as EUR/JPY holds above 183.00 on a daily closing basis, the path of least resistance points to further tests of the 185.80–186.30 resistance band.

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

Japanese Yen FAQs

What key factors drive the Japanese Yen?

The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.

How do the decisions of the Bank of Japan impact the Japanese Yen?

One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.

How does the differential between Japanese and US bond yields impact the Japanese Yen?

Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.

How does broader risk sentiment impact the Japanese Yen?

The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.