EUR/JPY trades flat as ongoing seller pressure caps bullish attempts

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Euro vs yen drops 0.51% today

Highlights

The Bank of Japan kept its benchmark interest rate unchanged by an 8-1 vote and maintained its existing monetary policy framework.
Underlying inflation has reached the central bank's 2% target, and the Bank of Japan plans to quicken ETF divestment, a process forecast to take 43 years to complete.
EUR/JPY faces broad downside pressure with price contained between ¥174.37 to ¥176.13, as technical indicators show a strong sell bias and limited probability of an upside move.

Yen steadies as BoJ policy status quo shapes market outlook

The Bank of Japan left its benchmark interest rate unchanged in an 8-1 vote, a move that maintains the existing monetary policy framework and preserves the current yield environment for the yen, according to Bloomberg. The central bank also signaled that underlying inflation has reached its 2% target, marking a key milestone that could shape future policy discussions. In addition, the Bank of Japan outlined plans to accelerate the sale of its ETF holdings, with projections indicating it could take 43 years to fully divest, as reported by Zerohedge. Collectively, these decisions provide a steady backdrop for yen flows and guide market sentiment around longer-term policy normalization.

Bearish momentum dominates as intraday resistance caps rebounds

EUR/JPY trades below its MA-20 at ¥176.17 and MA-50 at ¥176.09 on the H1 timeframe, with the MA-200 at ¥183.32 on the D1 chart marking a higher-level barrier. The Ichimoku Kijun stands at ¥176.03, setting immediate resistance for any attempted rebounds. Momentum indicators are firmly bearish, as MACD and ADX both indicate a sell bias, the RSI is at 35.44 and in the sell zone, and both Stochastic RSI and CCI reside in oversold territory. Bull/Bear Power confirms seller dominance intraday, while the Awesome Oscillator is neutral, pointing to a lack of counter-trend conviction.

Sideways trading expected as downside risk outweighs bullish chances

In the short term, EUR/JPY is likely to remain rangebound between ¥174.37 and ¥176.13, reflecting typical volatility at current levels. Probabilities indicate a very low chance of a sustained move higher, with downside risk being the dominant scenario. The baseline expectation is for sideways movement within this range, but a push below ¥174.37 would expose the pair to deeper losses, while any meaningful bullish reversal would need a clear break above resistance at ¥176.03.

Anton Kharitonov, expert at Traders Union, sees little change in the technical or fundamental backdrop after the Bank of Japan’s steady policy stance. He remains cautious, noting that momentum indicators show clear bearish signals and EUR/JPY trades below key resistance levels. The range between ¥174.37 and ¥176.13 defines the likely action, with sellers still in control. "Until we see a strong break above ¥176.03, I remain defensive and expect further sideways or downside movement."

Earlier, analysts noted that EUR/JPY was under sustained downward pressure as both technical signals and macro factors weighed on the pair. This view is reinforced by the Bank of Japan’s unchanged policy stance and the persistent bearish momentum, suggesting traders should closely monitor for a decisive break below ¥174.37 as a trigger for further downside.

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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