EUR/JPY slipped slightly after modest gains the day before, trading near 186.70 during Asian hours on Monday. The daily chart places the pair in an ascending channel, pointing to a bullish bias.
The pair is consolidating above the nine-day and 50-day Exponential Moving Averages (EMAs). The 14-day Relative Strength Index (RSI) is near 60, which suggests positive momentum without extreme conditions.
EUR/JPY may move towards the all-time high of 187.95, set on 17 April. A break above 187.95 could open the way to the channel’s upper boundary near 189.70.
On the downside, immediate support is at the nine-day EMA at 186.75. This area is close to the channel’s lower boundary around 186.60, while a sustained break below the channel could bring the 50-day EMA at 184.94 into view.
The technical analysis was produced with help from an AI tool.
The EUR/JPY cross is signaling a continuation of its upward trend, as it remains within a clear ascending channel. With the price holding above key moving averages, we see the potential for further gains in the near future. This setup encourages strategies that benefit from a rising market.
For those expecting a move higher, buying call options could be a straightforward approach. We are looking at strike prices around the 188.00 level, near the recent high, with a more aggressive target being the 190.00 strike. The current momentum suggests such a push is possible without the market being overly stretched.
This technical picture is supported by recent news, with Eurozone inflation for early April coming in at a firm 2.6%, reinforcing the European Central Bank’s hawkish stance. This continues the policy direction that we saw solidify in the last half of 2025. The euro’s fundamental strength provides a solid backbone for this trade.
Alternatively, selling out-of-the-money put options is a way to generate income while maintaining a bullish bias. We could consider selling puts with a strike near the 186.50 support level for a more aggressive play. A more conservative entry would be to sell puts around the 185.00 strike, which aligns with longer-term support.
This strategy also relies on continued yen weakness, which seems likely given the Bank of Japan just reaffirmed its accommodative policy last week. This policy divergence is widening, especially as Japan’s own preliminary Q1 GDP figures were just reported at a lackluster 0.2%. This dynamic is very similar to the conditions that drove the pair up through 2025.
It is crucial for us to use the lower boundary of the channel, around 186.60, as a key decision point. A decisive break below this level would signal a potential reversal in the bullish trend. Such a move would require us to reassess our positions quickly.
