Fundamental / Economic Backdrop (short term)
EUR/JPY trades around 182.90, with the cross shaped primarily by ECB–BoJ policy divergence and shifting global risk appetite. The ECB remains in a cautious holding pattern after earlier rate cuts in 2025, with inflation progress slow but steady and euro-area activity data stabilising modestly into year-end. Markets currently price little risk of near-term tightening or renewed cuts, leaving policy largely neutral for currency direction.
Japan’s environment remains dominated by the BoJ’s very slow normalisation path. Despite inflation metrics holding around target ranges, wage growth has lacked persistence and yield-curve control adjustments have been measured. The BoJ remains substantially more accommodative than other G10 central banks, maintaining structural downward pressure on the yen.
Risk sentiment remains an important driver: global equities remain firm, manufacturing PMIs have stabilised, and risk-on positioning typically favours EUR/JPY upside. Any renewed volatility—particularly stemming from US macro surprises or geopolitical risk—would provide asymmetric support for the yen.
Fundamental / Economic verdict
Short-term macro factors continue to favour mild EUR/JPY strength, supported by euro-area stability and persistent BoJ policy divergence. Downside risks relate mainly to any abrupt shifts in global risk appetite rather than central bank policy changes.
Technical and Market Sentiment (short term)
EUR/JPY remains in an elevated bullish structure, consolidating just below the recent highs. Momentum studies (RSI/MACD) indicate mild overextension but without reversal confirmation. Price action suggests steady buying interest above key support zones.
Key levels:
| Bias Area | Levels | Notes |
|---|---|---|
| Immediate resistance | 183.40 – 183.70 | Short-term breakout zone; sustained close above turns momentum decisively bullish |
| Secondary resistance | 184.20 – 184.50 | Extension target; may attract profit-taking |
| Immediate support | 182.40 – 182.20 | First intraday reaction zone; break would weaken short-term structure |
| Stronger support | 181.60 – 181.30 | Must-hold zone to preserve broader bullish bias |
Market sentiment remains moderately bullish but stretched; dips are likely to be bought while above 181.60.
Technical verdict
Trend and momentum favour continuation higher, though intraday pullbacks are probable given elevated positioning. The bullish structure holds while above 181.60.
Strategy (short term)
Intraday / Monday 15 December 2025 – Setup and Trade Ideas
| Setup Type | Entry Zone | Target | Invalidated Below/Above | Notes |
|---|---|---|---|---|
| Buy-the-dip continuation | 182.40 – 182.20 | 183.40 → 183.70 | 181.95 | Aligns with current bullish trend |
| Breakout long | Above 183.70 (confirmed close) | 184.20 → 184.50 | Back below 183.20 | Momentum-based extension |
| Countertrend probe | 183.40 – 183.70 | 182.70 | Above 183.85 | Only for tactical traders; riskier given macro bias |
Base Case & Risk Managed Outlook
Base case: Gradual appreciation towards 183.40–183.70 resistance, followed by consolidation.
Risk case: A break below 181.60 would shift bias to neutral/slightly bearish, targeting 180.80.
5 Day Outlook Scenarios
| Scenario | Probability | Description | Levels of Interest |
|---|---|---|---|
| Bullish continuation | Moderate–High | BoJ–ECB divergence drives EUR/JPY higher; risk sentiment stable | 183.70 → 184.50 |
| Range consolidation | Moderate | Price oscillates between 182.20 and 183.40 awaiting macro catalysts | Buy dips; sell extreme tops |
| Yen-strength correction | Low | Triggered by risk-off or unexpected BoJ signals | 181.60 → 180.80 |
Summary
Fundamentals continue to lean in favour of EUR/JPY upside due to policy divergence and steady euro-area sentiment. Technical structure remains bullish with support layers intact and resistance at 183.40–183.70 pivotal for further continuation. Strategy favours dip-buys or momentum breakouts, with risk management centred around 181.60 as the key structural floor.
EURJPY Chart
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