EUR/JPY eased after two days of gains and traded near 183.90 during Asian hours on Thursday, after slipping below 184.00. The daily chart shows sideways movement within an ascending triangle pattern.
The pair holds above the 50-day EMA, while the nine-day EMA sits near 183.80. The RSI is near 52, pointing to steady momentum rather than strong acceleration.
Resistance is near 184.70 at the upper boundary of the triangle. A move above this level could open the way towards the all-time high of 186.88, set on 23 January.
Support is at the nine-day EMA around 183.80, then the 50-day EMA at 183.39. Below that, support is near 182.80 at the lower triangle boundary, with a break lower risking a move towards 180.81, a near four-month low from 12 February.
The technical analysis was produced with the help of an AI tool.
The EUR/JPY cross is currently moving sideways inside an ascending triangle, suggesting a period of consolidation before a potential breakout. This reflects the fundamental split between the European Central Bank, which has signaled a slower pace of rate cuts after March inflation data came in at 2.5%, and the Bank of Japan’s continued caution. The pattern points to building pressure that derivative traders should be watching closely.
For those anticipating a bullish move, buying call options with a strike price just above the 184.70 resistance could be a sound strategy. A successful break would target the all-time highs near 186.88, and using options would define the risk on the trade. We have seen this kind of steady build-up precede sharp moves higher, particularly when interest rate differentials are a key driver.
Alternatively, if we expect this consolidation to continue for a few more weeks, selling an iron condor with strikes outside the 182.80 to 184.70 range could be effective. This strategy would profit from low volatility and the passage of time. Recent data showing Japan’s wage growth at a modest 1.9% reinforces the idea that the Bank of Japan will not rush to tighten policy, potentially keeping the pair in its current range.
To hedge against a downside surprise, buying put options with a strike below the immediate 183.80 support level offers protection. A break of the triangle’s lower boundary near 182.80 would be a significant bearish signal, potentially triggering a slide towards the February low of 180.81. This defensive position is worth considering, given the market’s quick shifts.
This current technical setup is reminiscent of the market action we saw in the third quarter of 2025 before a major trend developed. The wide interest rate gap continues to favor the Euro, supporting the popular carry trade strategies we observed last year. However, with the Relative Strength Index sitting at a neutral 52, it confirms that momentum is steady rather than aggressive for now.
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