EUR/JPY Falls Toward 171.00 as U.S.–EU Trade Deal Pressures Euro
The EUR/JPY pair dropped near 171.00 on Wednesday during the Asian session. The fall came after a new U.S.–EU trade agreement was announced, which many believe favors the United States more than Europe.
The deal includes a 15% tariff on European goods and a promise from the EU to invest $600 billion in U.S. energy and defense. This news upset many European leaders, especially from Germany and France, who fear it could hurt Europe’s economy in the long run. As a result, the euro weakened, while the safe-haven Japanese yen (JPY) gained strength.
From a technical view, the pair dropped from a one-year high of around 174.00 and is now struggling below key moving averages. If the pressure continues, it could test support levels at 171.60 and even fall toward 170.40. On the upside, resistance is seen at 172.25–172.70.
Investors are now watching the upcoming Eurozone inflation data and the Bank of Japan (BoJ) policy meeting. While the BoJ is expected to keep rates steady, any surprises in their statement could affect market sentiment.
This drop in EUR/JPY comes during a time of rising uncertainty around inflation, central bank decisions, and global trade policies.
Impact:
EUR/JPY might remain under pressure if Eurozone inflation stays low. Safe-haven buying could possibly push JPY higher, especially if BoJ comments seem more aggressive.