Will EUR/JPY test ¥179.01 resistance as French budget deficit concerns persist?

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Euro vs yen up 0.5% to ¥178.12

Highlights

The euro dropped to a 17-month low against the dollar as markets reacted to concerns over France's budget deficit and political uncertainty in the euro zone.
The official announcement of a Spanish general election for November 29 increased uncertainty and weakened the euro against both the yen and the Swiss franc.
EUR/JPY trades with short- and medium-term bullish signals, an expected range of ¥177.23 to ¥179.01, and a higher probability of an upward move.

Euro pressured by euro zone fiscal strain and Spanish election risk

The euro has fallen to a 17-month low against the dollar amid renewed concerns over France's budget deficit and mounting political uncertainty in the euro zone, according to Economictimes Indiatimes. These developments have increased risk aversion in currency markets and pressured the euro, while the Japanese yen remains weak despite warnings from Japanese authorities about its depreciation. Additional uncertainty followed the official call of a Spanish general election for November 29, which pushed the euro lower against both the yen and the Swiss franc, as reported by Fxstreet.

Mixed momentum signals as buyers hold above short-term support

On the technical front, EUR/JPY trades above its MA-20 and MA-50 on the hourly chart, while it remains below the MA-200 on the daily. The Ichimoku Kijun at ¥177.7 is acting as immediate support. MACD delivers a strong buy signal, and ADX confirms elevated trend strength. Bull/Bear Power shows intraday buyer control. Both RSI and CCI register buy readings, indicating mild bullish momentum, whereas Stochastic RSI and Awesome Oscillator are neutral, pointing to a divergence among short-term oscillators.

Rangebound outlook as volatility bands define near-term risk

Looking ahead to the next 2–3 sessions, EUR/JPY is expected to trade between ¥177.23 and ¥179.01 based on typical volatility bands. The base scenario foresees consolidation within this range. A confirmed breakout above resistance could send the pair toward the top of the range, while a dip below immediate support at ¥177.7 would raise the risk of a deeper pullback.

Viktoras Karapetjanc, expert at Traders Union, sees EUR/JPY supported in the near term by robust trend signals, despite the euro's recent weakness from political and fiscal uncertainty in France and Spain. He believes the persistent weakness in the Japanese yen and current economic sentiment could anchor the pair above key support levels. The analyst notes momentum is constructive, but broader macro risks may contain the upside. "If risk sentiment stabilizes in coming sessions, I expect the euro-yen to consolidate with a mild bullish tilt above ¥177.7," he says.

Earlier, analysts noted that EUR/JPY faced persistent bearish pressure with limited rebound potential amid a cautious technical outlook. The current analysis adds a new dimension with mixed momentum signals and increased political uncertainty, directing attention to potential volatility risks if EUR/JPY decisively breaks out of its short-term consolidation range.

Source of Data: EUR Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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