- EUR/JPY consolidates in a range on Tuesday amid a combination of diverging forces.
- Economic concerns due to the Hormuz risks undermine the JPY and support the cross.
- Intervention fears and hawkish BoJ bets limit JPY losses, capping gains for spot prices.
The EUR/JPY cross struggles to capitalize on the previous day’s goodish rebound from the 186.25 area, or a one-week low, and oscillates in a narrow range during the Asian session on Tuesday. Spot prices currently trade around the 187.20-187.25 region, nearly unchanged for the day, and remain well within the striking distance of the highest level since August 1990, touched last Friday.
The Japanese Yen (JPY) weakens slightly in reaction to a Reuters report that the Bank of Japan (BoJ) is increasingly likely to hold interest rates steady at its upcoming April meeting. This comes on top of economic concerns stemming from the Middle East conflict and the risk to energy supplies due to continued disruptions to shipping through the Strait of Hormuz. This turns out to be a key factor acting as a tailwind for the EUR/JPY cross.
The BoJ, however, is expected to signal readiness to hike in June as imported energy costs cloud the inflation picture. Moreover, speculations that Japanese authorities would step in to stem further weakness in the domestic currency hold back the JPY bears from placing aggressive bets. Apart from this, a modest US Dollar (USD) uptick is seen weighing on the shared currency, which contributes to capping the upside for the EUR/JPY cross.
The recent breakout above the 185.00 psychological mark comes on top of repeated rebounds from the 100-day Exponential Moving Average (EMA) and favors the EUR/JPY bulls. Adding to this, the Moving Average Convergence Divergence (MACD) indicator is in positive territory, and its histogram is still constructive. Moreover, the Relative Strength Index (RSI) hovers around 64, hinting at strong but not yet extreme buying pressure.
Meanwhile, initial support is reinforced by the 100-day EMA near 183.04, where a deeper pullback would be expected to attract dip-buying interest while the broader bullish structure remains intact. Unless the EUR/JPY cross slides back through this floor, the technical setup suggests that spot prices remain positioned to extend gains, with any consolidation above the moving average likely to be viewed as a pause within the prevailing uptrend rather than a trend reversal.
(The technical analysis of this story was written with the help of an AI tool.)
EUR/JPY daily chart
