EUR/JPY Retreats From All-Time Highs
The chart shows that the EUR/JPY pair climbed above ¥185.00 earlier this week for the first time on record. Since then, the pair has edged lower, with the yen gaining ground against the euro.
The pullback is being driven by a mix of fundamental factors, with developments in Japan playing a key role. Media reports suggest that Japan’s Finance Minister, Satsuki Katayama, has indicated that Tokyo may consider coordinated intervention with the United States in the FX market to bolster the yen.
At the identical time, traders are adjusting positions ahead of a pivotal week, which includes:
→ the Bank of Japan’s interest rate decision;
→ the potential disanswer of Japan’s parliament and the calling of snap elections;
→ the release of euro area PMI data.
EUR/JPY: Technical Outlook
Price action remains within an upward-sloping channel (marked in blue), although momentum appears to be shifting.
Earlier in the week, bullish conditions dominated:
→ the pair broke above a short-term resistance line and held in the upper part of the channel;
→ it cleared the December peak and moved decisively beyond the psychological ¥185 level.
That strength proved short-lived, as tradeing pressure emerged:
→ the pair failed to sustain gains above 185.00;
→ a retreat towards the channel’s midpoint offered little support;
→ the decline extended further, with the 183.9 area turning from support into resistance.
While the lower edge of the channel may still provide a temporary floor for EUR/JPY, its ability to hold will be tested if Japanese authorities — potentially with US backing — take concrete steps to reinforce the yen.
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