EURJPY signals weakness as price stays below key resistance

EUR/JPY started the new trading week on a weak note, struggling to maintain bullish momentum despite an overall bullish market structure. The cross pair had difficulty breaking above the 185 resistance level and retreated from six-week highs, slipping below 184 during the early European session on Monday. As of now, EUR/JPY is trading near 183.80.

EUR/JPY outlook

After closing last week just below 185, EUR/JPY has declined roughly 120 pips with a bearish tone, pressured by a broadly weak Euro amid escalating geopolitical tensions. Meanwhile, the Japanese Yen gained strength following Japan’s strongest FX intervention warning since 2024, issued as USD/JPY surpassed 160. "We are hearing that speculative moves are increasing in the currency market, in addition to the ‌crude futures market. If this situation continues, it may be time to take decisive measures," Japan’s top currency diplomat Atsushi Mimura said.

Looking ahead, there seems to be a lot of supply near the 185 level, which has turned this zone into a major resistance for now. This supply zone needs to be overcome by bulls, or the outlook might flip bearish. Therefore, a medium-term study and technical analysis of the EURJPY chart suggest a high chance of a major pullback if the pair gains acceptance below 185.

Key Levels to Watch:

 

Support: Immediate support is at 183.50, with further downside targets at 182.70 and 182. The 182/181.80 zone is a critical support area, having acted as a demand zone multiple times in recent weeks. A break below this could open the path to new lows near 180.80/50.

Resistance: A sustained move above 185 would favor buyers, invalidate the bearish outlook, and potentially push EUR/JPY toward 186/186.90.

In summary, EUR/JPY is poised to continue its downside momentum unless bulls can decisively break through the strong resistance at 185.

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