EURJPY Analysis

Introduction

The EUR/JPY is a popular cross-currency pair that reflects the economic relationship between the Eurozone and Japan. It is influenced by the economic health of both regions, with the Eurozone’s economic growth and the Bank of Japan’s monetary policy being key drivers. The EUR/JPY tends to appreciate when there is an overall risk-on sentiment in global markets, as investors seek higher yields in the Eurozone.

Fundamentals and Interest Rates

The European Central Bank policy is Dovish with the (ECB) current Interest rate 2.4%. Latest change was Apr 17, 2025 (-25bp)%.
On that side the Bank of Japan policy is Hawkish and (BOJ) has set its interest rate to 0.5% by latest change, Jan 24, 2025 (25bp).
(ECB) Higher interest rates generally lead to higher returns on investments denominated in EUR. This tends to attract foreign capital into EUR assets.

Based on the economic and macro fundamental data, The Fundamental Bias of EUR is Weak Bullish and for the JPY is Moderate Bullish.
Ziwox considering Weak Bearish bias for this asset and we expect prices to decline in the long-term.
Our Ziwox A, mid-term Fundamental Score for EUR is 4. and Fundamental Score for JPY is 5. So, base on the Fundamental Score, we predict mid-term downside price movement.

Market Overview & Performance

In the current trading session, "London", Market risk sentiment is Strong Risk-OFF. The United States Dollar and Canadian Dollar recorded the strongest performance, while the Gold and Switzerland Frank are weakest so far.

Currencies performance vs US dollar "USD"
Gold "XAU", recorded a -1.24% decrease against us dollar.
Euro "EUR", performance has been -0.38% down so far
Pond "GBP", performance has been -0.38% down as of now
Australian dollar "AUD", has dropped by -0.37%
New Zealand dollar "NZD", has dropped by -0.3%
Japanese YEN "JPY", experienced -0.46% fall
Swiss franc "CHF", experienced -0.65% fall so far
Canadian dollar "CAD", has lost -0.19%
Market risk sentiment is OFF, Investors seek safety, favoring safe-haven currencies and assets while selling off riskier investments.

Market Sentiment and Positioning

EUR COT (Commitments of Traders):

Institutions Net Position on >Euro is 65028 included 196205 long, 131177 short and -4252 position changed from last week.
So they mainly have a bullish view on this asset and bought EUR for higher prices in long-term.
Last week -4252 repositioning Indicates closing positions, short-term profit-taking, or a general pessimism about prices.

JPY COT (Commitments of Traders):

Institutions Net Position on >Japanese Yen is 177814 included 202373 long, 24559 short and 5959 position changed from last week.
So they mainly have a bullish view on this asset and bought JPY for higher prices in long-term.
Last week 5959 repositioning Indicates that they are optimistic about higher prices in mid-term.

Retail Traders:

Crowd traders or Retail traders are bullish on the EURJPY with 51% 49% ratio. 3042 long pos and 2116 short position.
We generally adopt a contrarian approach towards crowd sentiment and we give probability EURJPY prices may decrease.

Technical Levels and Support/Resistance

The EURJPY pair is approaching a critical technical support level near 161.727.
Technical trend is BUY, If the pair continues to weaken, this support could become a good area to enter a long positions.
On the upside, there is key resistance near 164.109. Technically, A break above this resistance could signal a shift in momentum, but need to get a confirmation in this area due to the reversal or correction potential.