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EURJPY trade ideas

EURJPYEUR/JPY Analysis: 10-Year Bond Yields, Interest Rate Differentials, UIP, and Carry Trade 1. Current Bond Yields and Interest Rate Differentials Eurozone 10-Year Yield: ~2.50% (Germany’s benchmark yield, down 3bps post-ECB rate cut) . Japan 10-Year Yield: ~1.45% (recently fell to a 3-week low amid strong bond auctions) . Yield Spread: 2.50% (EUR)−1.45% (JPY)=+1.05% The Eurozone’s higher bond yield provides a carry advantage for EUR. Policy Rate Differential: ECB Deposit Rate: 2.00% (cut by 25bps on June 5, 2025) . BoJ Rate: 0.50% (unchanged since March 2025) . Rate Spread: 2.00% (EUR)−0.50% (JPY)=+1.50% 2. Uncovered Interest Rate Parity (UIP) Theory: The EUR should depreciate against JPY to offset the +1.50% rate spread, eliminating arbitrage opportunities. Reality: UIP often fails due to risk premiums and market dynamics. Despite the Eurozone’s higher rates, EUR/JPY remains supported by carry trade demand and JPY weakness tied to BoJ policy. 3. Carry Trade Dynamics Mechanics: Borrow JPY (0.5% rate) to invest in EUR assets (2.0% rate), profiting from the +1.50% rate spread and +1.05% yield spread. Current Viability: Opportunity: The yield and rate differentials favor EUR, making the carry trade attractive. Risks: ECB Dovishness: Further rate cuts (markets price ~28% chance of a July cut) could narrow the spread. BoJ Policy Shifts: Japan’s Ministry of Finance may reduce long-term bond issuance to curb yields , while the BoJ continues tapering bond purchases , limiting JPY weakness. Trade Tensions: U.S. tariff policies cited by the ECB and BoJ could heighten volatility. Key Data for JPY (Japan) June 6: 2-Year JGB Auction: Yield at 0.691% (prev. 0.68%), signaling stable short-term debt demand. 3-Month Bill Auction: Reflects liquidity conditions and BoJ policy expectations. Bank Lending YoY: Steady growth indicates domestic credit demand. June 10: PPI YoY: 4.0% (prev. 4.2%), easing input price pressures but still above BoJ’s 2% target. June 11: Machine Tool Orders YoY: 7.7% (prev. 8.1%), indicating slowing industrial demand amid global trade risks. 4. Key Economic Context Eurozone: ECB cut rates to 2.00% but kept future easing options open, citing trade tensions and revised inflation forecasts (2.0% for 2025) . Japan: BoJ held rates at 0.5% in May 2025, slashing GDP growth forecasts (0.5% for FY2025) due to trade risks . Summary Table Metric Eurozone (EUR) Japan (JPY) 10-Year Bond Yield 2.50% 1.45% Policy Rate 2.00% 0.50% Yield/Rate Spread +1.05% (bond), +1.50% (policy) — Carry Trade Bias Bullish for EUR Bearish for JPY Key Risks ECB dovishness, trade tensions BoJ yield control, fiscal sustainability Conclusion EUR/JPY Outlook: Moderately bullish for EUR due to yield and rate advantages, but UIP suggests potential long-term EUR depreciation. Carry Trade: Profitable if ECB maintains rates and JPY remains weak, but monitor ECB guidance (July meeting) and BoJ bond issuance plans. Trade Strategy: Favor EUR longs on dips toward demand floor.
Long
by Shavyfxhub
EURJPY → False breakout of resistance. Reversal?FX:EURJPY is testing the resistance of the trading range as part of a distribution movement, but the situation ends with a false breakout and price consolidation within the flat. Against the backdrop of the falling dollar, the Japanese yen is strengthening and thus exerting a corresponding influence on the currency pair. EURJPY is forming a false breakout of resistance within a distribution movement formed after a retest the support of the flat. The price returns to the channel. After a false breakout of resistance and a return of the price below a strong key level, a base is forming in the form of support at 163.2 (trigger). Resistance levels: 163.4, 163.6 Support levels: 163.2, 162.7 A breakdown of the 163.2 trigger and price consolidation below the key level could intensify the sell-off, triggering a further decline. Best regards, R. Linda!
Short
by RLinda
11
Lingrid | EURJPY support Zone Buy Setup in Sideways MarketThe price perfectly fulfilled my previous idea . FX:EURJPY is currently hovering above the 162.810 breakout level after reclaiming it following a fake breakout to the downside. The price action forms a potential higher low above the upward trendline, suggesting bullish continuation is in play. A successful bounce here could aim for 164.450 as the next resistance test. Momentum will likely pick up if the price stays above the rising trendline. 📈 Key Levels Buy zone: 162.810 Buy trigger: bullish candle bounce above trendline Target: 164.450 Sell trigger: daily close below 162.810 💡 Risks Trendline failure would negate bullish structure Resistance at 164.450 could attract sellers Consolidation may extend before a breakout confirms direction Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Long
by Lingrid
3
EURJOY Can continue to fall and Excite trigger moving EUR/JPY testing a key resistance level within a trading range. However, the recent attempt to break above this level resulted in a false breakout, followed by price consolidation within a flat structure. Amid a weakening U.S. dollar and a strengthening Japanese yen, the pair is experiencing cross-currency pressure. This has led to the formation of a strong support base around the 163.000 and 162.200 levels. Please note that and share your thoughts in comments for more analysis Thanks.
Short
by MrMartin_11
Bearish reversal?EUR/JPY is rising towards the resistance level which is an overlap resistance that lines up with the 50% Fibonacci retracement and could drop from this level to our take profit. Entry: 163.18 Why we like it: There is an overlap resistance level that lines up with the 50% Fibonacci retracement. Stop loss: 163.18 Why we like it: There is a pullback resistance level that is slightly above the 61.8% Fibonacci retracement. Take profit: 161.61 Why we like it: There is a pullback support level. Enjoying your TradingView experience? Review us! Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Everest Fortune Group’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Everest Fortune Group.
Short
by VantageMarkets
EURJPY could be about to soarThe price is stuck in a large ascending triangle pattern. But with stocks moving higher, cryptocurrencies gaining momentum, and the trade war easing, could this pattern finally break? Watch the video to see which levels matter. This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
by ThinkMarkets
EUR/JPY Technical Breakdown: Rising Wedge Breakdown + Target🔺 1. Rising Wedge Pattern Explained A Rising Wedge is formed when: Price action creates higher highs and higher lows, but The slope of the support line is steeper than the resistance line. This signals that buyers are losing strength, and momentum is fading. In this chart: The wedge began forming around mid-February 2025. Price was compressing within converging trendlines. After multiple failed breakouts near resistance (~165.50), the pair finally broke below the lower trendline, confirming a bearish breakout. This pattern is considered reliable because it traps late buyers and shifts sentiment from bullish to bearish quickly once the lower boundary is breached. 🔻 2. Key Technical Zones 📌 Major Resistance Zone (~165.00 – 166.00) Strong supply area; price has rejected here multiple times since late 2023. Resistance was confirmed again during the wedge formation. High volume spike noted near this level, followed by a steep drop—evidence of distribution and smart money exiting long positions. 📌 Major Support Zone (~156.00 – 157.00) Historically held as a demand zone. Previous bounces suggest it is structurally significant. However, repeated tests can weaken the zone, increasing the likelihood of a breakdown. 🎯 Target Price: 153.433 Measured by taking the height of the wedge and projecting it from the breakout point. Coincides with a previously tested level (support turned target). Bears could aim for this level as a swing target. 📉 3. Market Psychology Behind the Pattern As price climbs inside a rising wedge, volume often declines, showing buyer exhaustion. False breakouts near the top of the wedge trap breakout traders, adding fuel to the downside move once price breaks the lower boundary. The sharp selloff post-breakout is often driven by stop-loss cascades and aggressive short positioning. 🔁 4. Potential Price Path & Trade Plan Retest in Progress: Price may retest the broken wedge support (now resistance) near 163.00–164.00 before further decline. This retest zone offers a high-probability short entry opportunity with tight risk management. Immediate Downside Levels: 160.00 (psychological level), 157.00 (support zone), and final target at 153.43. Bearish Continuation Scenario: If the pair maintains below the wedge and forms lower highs, it confirms ongoing bearish sentiment. 🛑 5. Risk Factors to Monitor ECB or BOJ monetary policy shifts (rate cuts/hikes, yield curve control updates). Risk-on vs risk-off flows, especially in times of geopolitical or macroeconomic shocks. Intervention by the Bank of Japan to protect JPY from excessive weakening. ✅ Conclusion: A Tactical Short Opportunity The EUR/JPY chart is setting up for a potential medium-term short swing trade following a confirmed rising wedge breakdown. With clear rejection from a long-standing resistance zone and fading bullish momentum, the technicals align for a move toward 153.43 over the coming weeks. Traders should watch for clean retests and structure-based entries, managing risk around 164.50 with profit-taking at key support zones along the path.
Short
by GoldMasterTrades