EUR/JPY was little changed for a second day, trading near 184.70 in Asian hours on Friday. On the daily chart, price sits at the upper edge of a developing descending wedge.
The pair remains below the nine-period and 50-period Exponential Moving Averages (EMAs), which limits the near-term direction. The 14-day Relative Strength Index is near 47, pointing to neutral momentum.
Key Resistance Zone
Resistance is clustered near 185.00, with levels at the nine-day EMA of 184.76 and the 50-day EMA of 184.85, plus the wedge boundary. A break above this area could open a move towards the all-time high of 187.95, set on 17 April.
If price fails to clear the wedge, it could drift lower towards the three-month low of 181.87 from 16 March. Further support sits at the five-month low of 180.81, marked on 12 February.
The technical analysis was produced with assistance from an AI tool.
We are seeing the EUR/JPY pair test a significant resistance zone, which looks very similar to the setup we saw back in the spring of 2025. The pair is consolidating near the upper boundary of a descending wedge pattern, a formation that often precedes a strong upward move. The critical question for the coming weeks is whether there is enough momentum for a decisive breakout.
Options Strategy Considerations
The fundamental case for a bullish move appears stronger now than it was last year. Recent inflation data from the Eurozone for April 2026 came in at 2.8%, higher than forecasts and suggesting the European Central Bank may keep interest rates elevated for longer. Meanwhile, the Bank of Japan has signaled it will maintain its accommodative stance, which should continue to weaken the yen.
For traders anticipating a breakout above the 185.00 level, buying call options could be an effective strategy. This approach allows us to profit from a potential rally towards the 190.00 psychological level while keeping our initial risk limited to the premium paid. We saw how quickly the pair moved in late 2025 once a key resistance level was broken.
On the other hand, we must acknowledge the risk of a failed breakout, as momentum indicators are currently neutral. A rejection from this resistance zone could see the price fall sharply, similar to the downturn we witnessed in the third quarter of 2025. In that case, buying put options with a strike price below 184.50 would offer a way to profit from a move back towards the 182.00 support level.
Given the tight coiling of the price, a volatility-based strategy is also worth considering. Purchasing a long straddle, which involves buying both a call and a put option with the same strike price and expiration, would be profitable if the EUR/JPY makes a large move in either direction. This strategy is ideal for a market that is clearly preparing for a major move but is uncertain about the direction.
