The EUR/JPY currency pair gained strong upward momentum early Monday, ending a three-day losing streak and climbing from Friday’s nearly one-month low near 161.00 to trade around 162.70-162.75 during the Asian session. The rally was supported by US President Donald Trump’s decision to postpone tariff implementation on the European Union (EU), providing a boost to the euro.
Technically, EUR/JPY demonstrated resilience just below its 200-day Simple Moving Average (SMA) last Friday. The recent upward move favors bulls; however, neutral daily chart oscillators and contrasting monetary policy outlooks between the Bank of Japan (BoJ) and the European Central Bank (ECB), coupled with ongoing geopolitical risks that typically strengthen the safe-haven yen, advise caution.
The intraday advance may face stiff resistance near the 163.00 psychological level. A sustained break above this threshold would signal the end of the recent pullback from the year-to-date high of 165.20 reached earlier this month, potentially clearing the way for further gains toward the 163.40-163.45 supply zone and the 164.00 mark.
Conversely, a drop below immediate support at 162.40 could attract buyers on dips, with downside limited near 162.00. Breaching the 200-day SMA around 161.45 decisively would shift momentum toward bears, potentially driving the pair down to retest Friday’s swing low near 161.00 and, ultimately, the key 160.00 psychological level.
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