EUR/JPY paused after three straight days of gains, trading near 182.70 during European hours on Monday. Price was slightly above the top of a descending channel. The 14-day RSI was 47, staying below 50. The pair traded just under the 50-day EMA at 182.80 and slightly above the 9-day EMA at 182.62. The 9-day average has flattened after a pullback, while the 50-day EMA is losing upward momentum.

Key Technical Levels

A daily close above the 50-day EMA could clear the way for a move toward the record high of 186.88, set on 23 January. If the pair fails to hold above the 9-day EMA, it could drop back into the channel and drift toward the lower boundary near 177.80. A break below the channel would likely add downside pressure, with the next target near the four-month low of 175.70. This technical analysis was produced with help from an AI tool. EUR/JPY is now testing a key hurdle at the 50-day EMA near 182.80. The market looks undecided, supported by the short-term 9-day EMA but capped by broader resistance. The neutral RSI supports this view and suggests traders are waiting for a clear trigger. Recent figures show Eurozone inflation remains sticky, with the latest readings around 2.4%. This makes the European Central Bank’s rate path less clear. Meanwhile, the Bank of Japan has kept a supportive policy stance, especially after the short-lived hawkish shift seen in late 2025. This policy gap can favor a stronger Euro versus the Yen.

Options Strategy Considerations

If you expect a bullish breakout, a confirmed daily close above 182.80 would be an important signal. That could support buying call options or setting up bull call spreads, with a target near the January high of 186.88. Option pricing may look appealing while the market is paused. If the pair rejects this resistance and falls below the 9-day EMA at 182.62, it could slide back into the down channel. That would favor bearish setups such as buying put options or using bear put spreads. The first downside target would be the lower channel boundary around 177.80. With price tightening and key data releases ahead, volatility may rise. A similar consolidation in October 2025 was followed by a sharp breakout. Because the next move could be large in either direction, a long-volatility trade such as a straddle may be worth considering. This approach aims to profit from a big move without having to pick the direction. Create your live VT Markets account and start trading now.

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