EUR/JPY is getting close to its all-time high of 184.95, currently trading around 184.30. The 14-day Relative Strength Index (RSI) is at 61, indicating strong momentum without being overbought. The nine-day exponential moving average (EMA) is above the 50-day EMA, signaling a continuing bullish trend. Resistance is at 184.95, with a psychological barrier at 185.00. If this resistance is broken, it could lead to further gains.

Support and Momentum

Initial support is found at the nine-day EMA of 183.60. If it falls below this level, it may reduce momentum, targeting the 50-day EMA and the monthly low at 181.57. The Euro (EUR) had mixed results against major currencies. It increased by 0.17% against the USD and 0.33% against the JPY, but dropped by 0.17% against the USD and slightly adjusted against GBP and CAD. The EUR/JPY shows strong upward momentum as it nears the critical resistance level of 185.00. With the RSI below the overbought zone at 61, there is room for this rally to keep going. The nine-day EMA at 183.60 is our immediate focus for this bullish trend. This technical strength is backed by economic factors. The Eurozone’s latest core inflation rate for December 2025 remains at 2.8%, pressuring the European Central Bank to maintain its firm stance. Meanwhile, Japan’s Q4 2025 GDP figures showed a slight economic downturn, reinforcing the Bank of Japan’s dovish approach. This growing difference in policies between the two central banks is driving the rise in this currency pair.

Trading Strategies

For those trading derivatives, buying call options with strike prices at or above 185.00 could be a good strategy to take advantage of a potential breakout in the coming weeks. If the price falls below the 183.60 support level, it may be a signal to consider buying puts to protect against a deeper drop toward 181.57. The main risk is a failure to break the all-time high set in December 2025. We should remember the strong trend seen in the second half of 2025, where the interest rate difference widened significantly, benefiting carry trades. However, we also need to keep in mind the sharp but temporary pullback in November 2025, reminding us that volatility can increase near record highs. Therefore, while the trend seems to be upward, we should manage our positions carefully as these historic levels are approached. Create your live VT Markets account and start trading now.

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