Eurozone Inflation In Focus
Markets are waiting for the Eurozone’s preliminary HICP inflation data due later on Tuesday. A higher reading could support the Euro against the Yen. On the daily chart, price has slipped back towards 183.25–183.50 after failing to hold above recent highs near 186.00. The Bollinger midline is near 183.40, and RSI is in the low-50s after easing from stronger levels. First support is at 183.40, then 182.50, and then the 100-day EMA near 181.20. Resistance is at 185.00, followed by 186.00 and the upper Bollinger Band near 186.25. If the pair stays below 185.00, it may consolidate or drift towards 182.50. A daily close above 186.00 would point back to the wider uptrend.Short Term Strategy Considerations
Given the current price action around 183.90, we see a short-term consolidation phase for EUR/JPY. While the broader uptrend from the past couple of years remains, the failure to push past 186.00 suggests buying momentum is fading. For the next week or two, range-bound strategies seem most appropriate. The yen is getting a boost from more than just geopolitical jitters. We’ve just seen the minutes from the Bank of Japan’s January 2026 meeting, which showed a more serious debate about ending their ultra-loose policy than previously expected. With core inflation in Tokyo staying above 2% for over 20 consecutive months, the market is pricing in a higher chance of a policy shift this year, supporting the JPY. On the other side, the Eurozone’s preliminary inflation numbers for February 2026 just came in at 2.1%, slightly hotter than the 1.9% forecast. After the European Central Bank paused its hiking cycle in late 2025, this persistent inflation makes them less likely to talk about rate cuts soon. This dynamic is likely what is keeping the pair from falling more sharply. Considering this tug-of-war, selling out-of-the-money call options with a strike price at or above the 185.00 resistance level could be a viable strategy. This allows traders to collect premium, capitalizing on the view that the cross will struggle to break new highs in the immediate future. The primary risk is a sudden surge in Eurozone inflation data that pushes the pair through that resistance. For those holding long-term bullish positions, the current dip is a cause for caution but not panic. Buying protective put options with a strike near 182.00 could serve as a cheap form of insurance. This would shield profits from a potential deeper correction toward the critical 100-day moving average support level around 181.20. We must remember the significant run-up we witnessed through 2024 and 2025, so this period of sideways movement is not unexpected. The key level to watch remains that 100-day average near 181.20. A firm break below that would signal a more significant shift in the trend we’ve been riding. Create your live VT Markets account and start trading now.
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