EUR/JPY Outlook: Bulls in Control but Caution Needed
The EUR/JPY pair moved up to around 171.65 in early European trading on Friday. It’s still showing strength as it stays above the 100-day moving average, which suggests the upward trend is still in place. However, the 14-day Relative Strength Index (RSI) has crossed 70, meaning the pair is now overbought. This could lead to a short pause or a small correction before the price continues higher.
Important levels to watch:
Resistance (upside limits):
The first major barrier is at 172.00, which is a psychological level and also a recent high. If the pair breaks above this, the next possible target is around 172.53, and then 174.52, which was the high point in July 2024.
Support (downside levels):
On the downside, the pair has support at 170.00. If it falls below that, the next key levels are 169.04 and 168.10, which were recent lows.
Meanwhile, the Japanese Yen has gained a little strength. This is because traders are lowering their expectations about the Bank of Japan raising interest rates soon. Concerns over U.S. tariffs also add to the cautious mood.
Impact:
EUR/JPY could take a short break or dip slightly. But if buying continues, the price might rise toward 174.50 in the coming days.