Price Rejection at Local Support Brings Buying Opportunities Back into Focus

Central Bank

Economic

Summary:

With price rejecting this area once again, we can find bullish opportunities targeting the overhead resistance zone at 186.22, a level recently tested on June 16.

BUY EURJPY

EXP

TRADING

183.850

Entry Price

186.220

182.000

183.888 -0.078 -0.04%

0.0

Pips

Flat

182.000

Exit Price

183.850

Entry Price

186.220

Expectations that the Bank of Japan (BoJ) will continue tightening its monetary policy this year keep gaining traction. At its meeting this month, the central bank raised interest rates by 25 basis points to 1%, while the Summary of Opinions (SoP) released on Wednesday revealed that one policymaker believes the benchmark rate should move "as soon as possible" toward the estimated neutral level of around 2%.

Concurrently, Japanese authorities have reiterated their readiness to support the yen against speculative movements in financial markets. In this context, a virtual meeting held earlier this week between Japan's Finance Minister, Satsuki Katayama, and U.S. Treasury Secretary, Scott Bessent, fueled speculation regarding a potential coordinated effort between both nations to stabilize the Japanese currency.

In Europe, investors are showing growing doubts about the necessity of further rate hikes by the European Central Bank (ECB). Earlier this month, the institution increased interest rates by 25 basis points to 2.25% and restated that future decisions will remain strictly data-dependent.

Nevertheless, ECB Executive Board member Isabel Schnabel pointed out on Wednesday that further monetary tightening might still be required. According to Schnabel, "from the current perspective, more hikes are needed to reach 2%, as ECB rates are not yet restrictive." She also highlighted that factors such as war, inflation, and economic growth will be decisive in determining the timing and scale of any additional adjustments.

Despite these comments, markets have dialed back their expectations for aggressive rate hikes following the recent drop in oil prices. Currently, traders are pricing in only one additional increase before the end of the year.

On the other hand, the latest economic indicators have provided encouraging signs for the European economy. In Germany, the IFO Business Climate Index advanced to 85.6 points in June from the previously recorded 85, matching market consensus. Both the current assessment and expectations components showed improvements, reinforcing the view of a gradual recovery in confidence within the Eurozone's largest economy.

At the regional level, the Eurozone Composite PMI Output Index increased by one point to 48.5, beating both market estimates and internal forecasts. This improvement was primarily driven by the services sector, while manufacturing activity remained virtually flat. Price Rejection at Local Support Brings Buying Opportunities Back into Focus_1

Price Rejection at Local Support Brings Buying Opportunities Back into Focus_1

Technical Analysis

EURJPY has reacted to the upside once again after touching the 183.18 support level. This exact level saw a bullish rejection back on April 30 following the BoJ intervention. With price rejecting this area once again, we can find bullish opportunities targeting the overhead resistance zone at 186.22, a level recently tested on June 16. Meanwhile, the 100 and 200-period moving averages are hovering at 185.04 and 185.07 respectively, sitting very close to each other. This indicates that the average price is consolidated near this area and suggests that the path of least resistance points upward.

Looking at the oscillators, the RSI is currently hovering at the 44 level after bouncing from the 24 level reached on June 24, when price tested the local support. Concurrently, the MACD displays a bullish histogram that is beginning to gain depth, with the signal lines tracking just below the neutral zone. A clean cross into positive territory would confirm a more extended upward move.

Trading Recommendations

Trading direction: Buy

Entry price: 183.90

Target price: 186.22

Stop loss: 182.00

Validity: Jul 07, 2026 15:00:00

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Price Rejection at Local Support Brings Buying Opportunities Back into Focus

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