EUR/JPY Price Forecast: Pullback toward 185.50 could offer fresh opportunities as bullish momentum remains intact
The EUR/JPY pair edged lower toward the 185.50 region during Tuesday's European session after posting gains over the previous two trading days. Despite the temporary retreat, the broader outlook remains tilted to the upside, with the cross continuing to trade comfortably above both its nine-day and 50-day Exponential Moving Averages (EMAs), suggesting that buyers still maintain control of the market.
Technical indicators also support the constructive outlook. The 14-day Relative Strength Index (RSI) is hovering around 54, indicating neutral-to-positive momentum without signaling overbought conditions. This suggests that EUR/JPY still has room to extend higher if key support levels continue to hold.
Meanwhile, price action remains confined within an ascending channel pattern, reinforcing the possibility that the current decline is merely a corrective pullback within a broader uptrend rather than the beginning of a bearish reversal.
On the upside, traders are closely monitoring the six-week high at 186.21, which stands as the first major resistance level. A decisive break above this barrier could encourage renewed buying interest and pave the way for a move toward the all-time high of 187.95, recorded in April. Further gains could then expose the upper boundary of the ascending channel near 188.20.
However, downside risks should not be ignored. Initial support is located at the nine-day EMA near 185.39, followed by the 50-day EMA around 185.12. A sustained move below these dynamic support levels could weaken the bullish structure and increase the likelihood of a deeper correction toward the lower boundary of the ascending channel near 184.70.
If bearish pressure intensifies, EUR/JPY could extend losses toward the March low of 181.87, while a break below that zone may expose the six-month low at 180.81.
For now, the technical picture favors the bulls as long as the pair remains above its short-term support levels. The current pullback may therefore be viewed as a period of consolidation before EUR/JPY attempts another move higher. Whether buyers can reclaim momentum and challenge the 186.21 resistance level will likely determine the pair's next major directional move.
