EUR/JPY is testing the 163.00 barrier after breaking above the nine-day EMA, currently trading near 162.80. The 14-day Relative Strength Index (RSI) is above 50, suggesting a positive outlook, while initial support is at the nine-day EMA of 161.93.
Resistance is anticipated at the psychological level of 165.00, with potential gains leading to a retest of the eight-month high at 166.69. A break below the initial support could weaken short-term momentum, with risks of decline towards 161.00 and the 50-day EMA at 160.43.
Deeper Decline Possibilities
A deeper decline might target the monthly low of 155.59 from March 4, and possibly 154.41, a level not seen since December 2023. Additionally, today’s Euro performance shows it is weakest against the Australian Dollar, with fluctuations indicated across various major currencies.
What we observe here is a market at an inflection point, with price action closely testing key technical thresholds. The break above the nine-day exponential moving average (EMA) suggests renewed buying interest, but the pair now faces immediate resistance at 163.00, a level that traders will be watching closely for signs of either exhaustion or continuation.
The Relative Strength Index (RSI) above 50 tells us that momentum currently favours the upside, but that alone does not guarantee a sustained advance. If buyers can push beyond 163.00, we have the psychological barrier of 165.00 looming ahead. Should that level give way, a move towards the eight-month high at 166.69 looks entirely feasible. However, bullish traders should remain aware that without a decisive push beyond resistance, the pair may lose steam and begin to rotate lower.
On the downside, the nine-day EMA at 161.93 provides an initial defence for the current trend. If sellers manage to push the market below this region, short-term momentum will weaken, opening the door for further declines towards 161.00 and potentially as low as the 50-day EMA at 160.43. Beyond that, we cannot ignore the risk of a deeper retracement towards levels last seen in early March. A break below 155.59 would mark a more profound shift in sentiment, dragging the pair to territory last visited in late 2023.
Euro Performance Overview
Beyond technical concerns, today’s broader Euro performance indicates weakness against the Australian Dollar, which may be a subtle indication of shifting capital flows across major currencies. Traders watching this particular pair will want to assess how Euro-crosses behave elsewhere, as relative weakness in other markets could create additional resistance for sustained upside progress.
For those engaged in derivatives markets, the current price structure suggests a dynamic few sessions ahead. The opportunity exists for continuation higher, but the map of resistance levels is clear, and risk parameters should be well defined. If downside risk escalates, a deeper retracement could occur rapidly, forcing a reassessment of bullish positioning. Maintaining flexibility will be key as price reacts to these well-defined areas.
