EURJPY – 02/12/2025

Fundamental / Economic Backdrop (short term)

EUR/JPY is currently influenced by opposing macroeconomic forces stemming from both the Eurozone and Japan:

• Bank of Japan (BoJ) policy expectations:
  Markets continue to price the possibility of further BoJ tightening after prior indications of policy normalization. This supports the yen by narrowing rate differentials.

• Eurozone data stability:
  Eurozone macro data has been mixed but generally stable. Inflation continues to moderate, and growth indicators remain soft but not deteriorating sharply, leaving the European Central Bank (ECB) in a steady stance.

• Risk sentiment effects:
  As a risk-sensitive cross, EUR/JPY tends to rise when global risk appetite is strong and fall under risk-aversion. Current sentiment is mixed and lacks a dominant risk-on or risk-off tone.

• Carry trade dynamics:
  EUR retains higher relative yield compared to JPY. However, expectations of BoJ tightening are diminishing this advantage, reducing upside momentum in EUR/JPY.

Fundamental / Economic verdict

Near-term fundamentals indicate a neutral-to-mild-bearish bias for EUR/JPY:

• EUR is stable but lacks strong upside catalysts.

• JPY is modestly supported by tightening expectations and risk-sensitive flows.
  The pair is likely to remain range-bound unless a decisive risk-sentiment shift or policy surprise emerges.

[100% Retracement]

Technical and Market Sentiment (short term)

Recent price structure indicates indecision and early signs of momentum weakening:

• Trend condition:
  EUR/JPY remains in a broader uptrend, but recent sessions show slowing momentum, with repeated struggles to clear upper resistance zones.

• Key levels:

  • Resistance: 182.00–182.60

  • Support: 180.00–179.30 (major structural zone)

  • Deeper support: 177.50–176.80 (if strong JPY strength materializes)

• Momentum signals:
  Short-term oscillators indicate weakening bullish drive, suggesting a likely consolidation phase or shallow pullback.

• Sentiment posture:
  Market behaviour indicates cautious positioning. Traders appear unwilling to extend bullish exposure without new catalysts.

Technical verdict

Technical conditions favor a range-bound posture with mild downside risk.
Unless EUR/JPY breaks above 182.60 with strong momentum, a rotation toward support zones or sideways consolidation is more probable than a trend extension.

[100% Retracement]
[50% Retracement]

Strategy (short term)

Intraday / Early Week (Wednesday 3 Dec 2025) – Setup and Trade Ideas

Key preferred levels for intraday monitoring:

• Support focus: 180.00 / 179.30

• Breakdown trigger: 179.30

• Upside trigger: 182.60

Base Case & Risk-Managed Outlook

• The most probable outcome is continued consolidation, with price oscillating in the 180.0–182.5 range.

• Minor bearish bias arises from yen-supportive fundamentals and waning EUR momentum.

• Risk-appropriate strategy:

  • Fade extremes of the range

  • Avoid aggressive trend-chasing

  • Weight positions modestly due to uncertain macro catalysts

Volatility is likely to remain moderate unless BoJ or ECB commentary disrupts the balance.

5 Day Outlook Scenarios

Final View

Current EUR/JPY conditions support range-bound behaviour with slight downside bias.
Macro fundamentals remain mixed, technical momentum is fading, and sentiment is neutral-cautious.
Over the next 5 days, directional conviction is low, making support-resistance trading and tight risk management the preferred approach.

[100% Retracement]
[61.8% Retracement]
[38.2% Retracement]