FX.co ★ PipsHunter99 | EUR/JPY

Technical and Fundamental Outlook of EUR/JPY The EUR/JPY pair is trading near 187.25, maintaining a strong bullish structure despite recent pressure caused by renewed geopolitical uncertainty and cautious market sentiment. From a technical perspective, the broader trend remains firmly positive as the pair continues to trade within a multi-month ascending channel, indicating that buyers still control the higher-timeframe direction. On the H4 timeframe, a major demand zone has formed between 186.50 and 186.80, where the pair has repeatedly attracted buying interest during recent pullbacks. This area is technically significant because it aligns with previous swing lows and the rising 20-period Simple Moving Average (SMA), which is currently acting as dynamic support. The upward-sloping 50-SMA also converges within this region, strengthening the support base and reinforcing the overall bullish market structure. When price remains above both the 20-SMA and 50-SMA, especially while the shorter-term moving average stays above the longer-term average, it generally confirms that bullish momentum remains intact. On the H1 timeframe, the pair continues to show positive short-term momentum, with the 20-SMA positioned above the 50-SMA, reflecting continued buying pressure in the intraday structure. Price action remains comfortably above both moving averages, suggesting that bulls still dominate the short-term trend. However, the pair is beginning to encounter stronger resistance near recent highs. Immediate supply pressure on H1 appears between 187.50 and 187.90, where previous rally attempts faced rejection. This zone also aligns with the psychological resistance area near the recent yearly highs touched earlier in April, making it an important barrier for bullish continuation. If buyers manage to break decisively above 187.90, the next major H4 supply zone between 187.80 and 188.20 could come into focus. This broader resistance region has historically attracted sellers through repeated wick rejections and consolidation tops, meaning a clean breakout above 188.20 would likely be needed to confirm another leg higher in the longer-term uptrend. On the downside, short-term demand on H1 is concentrated between 186.70 and 187.00, where buyers have consistently defended the market during minor retracements. This region acts as the first key support corridor and is reinforced by the nearby 20-SMA. If the pair falls below this zone, the market could shift toward testing the 50-SMA as secondary support, which may temporarily weaken bullish momentum but would not necessarily invalidate the broader uptrend unless deeper support levels break. The euro has recently come under moderate pressure as uncertainty surrounding a potential Middle East ceasefire triggered renewed hedging demand in financial markets. Reports indicated that U.S. President Donald Trump instructed officials to prepare for a prolonged blockade targeting Iran’s economy and oil exports rather than pursuing immediate military escalation or full disengagement. According to reports, the strategy focuses on restricting shipping activity linked to Iranian ports, increasing concerns that tensions in the region could persist for an extended period. This uncertainty has supported demand for safer assets and contributed to market volatility. At the same time, investors remain heavily focused on the upcoming European Central Bank (ECB) policy decision. Markets widely expect the ECB to maintain a relatively hawkish tone, even if interest rates remain unchanged in the near term. Expectations for future tightening have increased, with some analysts forecasting two additional 25-basis-point rate hikes later this year, potentially in June and September, which could push the ECB deposit rate toward 2.50%. These expectations continue to provide underlying support for the euro despite broader geopolitical uncertainty. Meanwhile, the Japanese yen has remained relatively firm due to growing expectations that the Bank of Japan (BoJ) will continue gradually tightening monetary policy. Several policymakers have recently expressed support for further interest rate increases, reflecting rising concerns about inflationary pressures linked to higher energy costs and geopolitical instability. BoJ Governor Kazuo Ueda reiterated that the central bank remains committed to gradual policy normalization as economic and inflation conditions evolve.