Key takeaways for the EURJPY technically
Correction Mode: EURJPY has broken below the 100-hour (182.39) and 200-hour (181.87) moving averages.
Risk Defined: Sellers finally have a clear resistance zone at 182.00–182.39 to lean against.
Next Target: A sustained move lower targets the 180.08 support level.
EURJPY’s historic rally: the backdrop
The EURJPY has been trading at all-time record levels, a move driven by prolonged yen weakness and sustained euro strength. The rally accelerated in October when the pair broke decisively above 176.00, followed by another major psychological break above 180.00 in November. From mid-November, price consolidated between 180.00 and 182.00, digesting gains before resuming the upside on December 9.
That breakout unleashed another leg higher, ultimately pushing the pair to a record peak of 183.158 on Friday. However, after reaching that extreme, price has corrected lower both yesterday and again today, raising an important question for traders: is there finally a chink in the armor?
Trend dominance vs. temptation to pick a top
So far, trading against the EURJPY trend has been a costly exercise. While the pair has seen periodic pauses and consolidations, corrective moves have remained modest, reinforcing the strength of the broader uptrend. That said, extended currency trends do not last forever, particularly when economic and policy dynamics between two regions/countries begin to shift.
Those shifts often develop gradually, but importantly, price action can start to signal change before the macro narrative fully turns. That makes the current technical behavior especially worth watching.
Short-term technical cracks begin to show
On the hourly chart, the tone has started to soften:
Price has moved below the 100-hour moving average, currently near 182.39
It has also slipped below the 200-hour moving average at 181.87
The pair is now trading below a key swing area between 181.827 and 182.00
The 38.2% retracement of the December rally also sits near the 182.00 level
The confluence of these technical breaks is important. Moving below this cluster of support gives sellers defined levels to lean against, something they have not had for much of the rally.
Risk definition improves for downside traders
With price currently trading near 181.78, sellers now have clearer ways to define and limit risk:
Closer risk can be defined near 182.00, where former support may now act as resistance
More conservative risk sits near the falling 100-hour moving average at 182.39
This structure allows traders looking for a corrective move lower to participate without fighting the trend blindly.
Downside targets: modest correction, not trend reversal (yet)
If the pullback develops, a modest corrective move could see EURJPY rotate toward the 180.08 level, an area that previously acted as support on November 25, December 1, and December 5 before the final upside breakout. From a risk-reward perspective, traders may be risking roughly 50 pips to potentially target 180 pips, assuming momentum builds to the downside.
Central banks loom large
Looking ahead, event risk is significant, with both the ECB rate decision and the Bank of Japan rate decision due later this week. Either could reinforce the dominant trend or accelerate a corrective phase. As always, the trend is your friend, but when risk can be clearly defined, traders still have a choice.
Watch the video analysis
In the video above, I (Greg Michalowski, author of Attacking Currency Trends) break down the technical factors driving EURJPY in real time, outlining the bias, the risk-defining levels, and the next upside and downside targets that matter most.
Be aware. Be prepared.
