EUR/JPY recovers from session low but remains down on Friday

The cross plunged near the start of the American session despite broad Euro gains elsewhere.
The Yen jumped after the US payrolls shock, with traders alert to intervention a week on from the joint Tokyo-Washington operation.
German industrial and trade figures offered the Euro little help, and the ECB is in no hurry.

Agustin Wazne FXStreet

EUR/JPY trades on the back foot on Friday, easing away even as the Euro (EUR) posts solid gains against the US Dollar (USD). The Japanese currency surged suddenly near the start of the American session after a surprisingly weak United States (US) employment report. But the cross recovered much of those losses fairly quickly.

Japan and the United States conducted coordinated Yen-buying intervention last Friday, a rare bilateral action, and that memory is enough to make traders reluctant to sell the Yen into a US Dollar that fell over 1% against the Yen during the early American session on Friday. The Yen now drifts well away from the 40-year low it reached in July.

The European Central Bank (ECB) continues to adopt a cautious stance after leaving interest rates unchanged at its latest meeting. Markets currently expect only one additional rate hike before the end of the year, with a lower chance of a second increase.

Iran's parliament speaker and top negotiator, Mohammad Bagher Ghalibaf, accused US President Donald Trump of staging "theater diplomacy" on Thursday, and under the draft plan reported by Fars, US and Israeli ships would be barred from the Strait of Hormuz. Flows through the waterway are unlikely to return to pre-war levels any time soon even if Iran and Oman finalize their framework. For an economy that imports almost all of its energy through that route, higher and less certain Crude prices erode Japan's terms of trade, which is the mechanism that drove the Yen to four-decade lows in the first place.

Short-term technical analysis:

On the 4-hour chart, EUR/JPY trades at 182.00, retaining a mildly bearish near-term bias as it holds below both the 20-period Simple Moving Average (SMA) at 182.17 and the 100-period SMA at 184.70. The pair is caught under a nearby horizontal cap at 182.13, while the Relative Strength Index (RSI) around 41 suggests subdued momentum rather than aggressive selling, hinting at a consolidative tone beneath these overhead levels.

On the topside, immediate resistance is seen at 182.13, followed by the 20-period SMA at 182.17. Asustained break above this cluster would open the way toward the next barrier at 182.69 before the broader 100-period SMA near 184.70.

On the downside, initial support aligns at 181.76, ahead of a lower horizontal floor at 181.30 where the cross found support early in the American session on Friday. A decisive breach there would reinforce the bearish bias and expose deeper retracement levels in the coming sessions.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Author

Agustin Wazne

FXStreet

Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.

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