EUR/JPY trades flat around 183.80 during early European hours on Wednesday. The Bank of Japan’s (BoJ) December “Summary of Opinions” showed some board members favoring continued tightening and potential rate hikes in 2026. The Japanese Yen (JPY) initially strengthened against the Euro (EUR) following the report. However, the slow and cautious pace of BoJ tightening has limited further upside for the JPY.
Meanwhile, the European Central Bank (ECB) kept interest rates unchanged in December and signaled a likely pause for an extended period. Money markets are pricing in a less than 10% probability of a 25 bps ECB rate cut in February 2026. Trading is expected to remain thin, with Japanese markets closed for the rest of the week and most global markets shuttered on Thursday for the New Year’s Day holiday.
Technical outlook supports bullish bias
On the daily chart, EUR/JPY maintains an uptrend above the rising 100-day EMA at 177.80, supporting the broader bullish trend. Pullbacks are expected to hold above this level to preserve upward momentum.
The pair hovers just below the upper Bollinger Band, with the bands gently widening and pointing higher, indicating sustained bullish pressure. The RSI at 61.05 rises from 60.87, confirming positive momentum without overbought conditions. Immediate resistance is seen at the upper band near 185.25, while support aligns with the middle band at 182.95 and the lower band at 180.65. A daily close above resistance could open the path for further gains, whereas rejection may trigger consolidation toward the midline.
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