Daily Chart Technical Picture
On the daily chart, the pair remains mildly bullish because it is holding above the rising 100-day EMA. The RSI has moved back towards 50 from overbought levels, suggesting weakening upside momentum rather than a reversal. Support is seen at 182.90, then around 181.30 where the 100-day EMA aligns, with 180.00 next if that area breaks. Resistance stands at 184.85 and then 185.70, near the upper Bollinger Band. The Yen’s value is driven by Japan’s economic performance, BoJ policy, yield differences between Japanese and US bonds, and risk sentiment. The BoJ’s ultra-loose policy from 2013 to 2024 weakened the Yen, while gradual policy unwinding in 2024 has offered some support. We see that the safe-haven demand for the Yen, which was a key concern due to Middle East tensions in early 2025, has since faded into the background. As of today, March 10, 2026, the market’s focus has shifted decisively back to the slow pace of policy normalization by the Bank of Japan. This has allowed the EUR/JPY to grind higher over the past year, recently trading near 188.50.BoJ Policy And Options Implications
The uncertainty we noted around the Bank of Japan’s interest rate path last year has resolved into a clear, cautious approach. After delivering two minor rate hikes in mid-2025, the BoJ has held its policy rate at 0.25%, as core inflation in Tokyo for February 2026 came in at a softer-than-expected 1.8%. This suggests Governor Ueda will not be rushed, creating an environment where selling JPY volatility through options could be a prudent strategy. From a technical standpoint, the support levels we watched near 181.30 in 2025 have long since become a distant floor. With the cross now well above its rising 100-week moving average, a strategy of selling out-of-the-money EUR/JPY put options could allow traders to collect premium while benefiting from the pair’s slow, upward drift. This aligns with the fundamental picture of a hesitant BoJ. The yield differential story remains central, but the dynamics have shifted since last year. While the BoJ has tightened modestly, the European Central Bank is now signaling a potential easing cycle as the latest Eurozone Q4 2025 GDP growth was revised down to just 0.1%. This divergence cap may limit explosive upside, making strategies like call spreads attractive for capturing measured gains while defining risk against a dovish turn from the ECB. Create your live VT Markets account and start trading now.
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