EUR/JPY Forecast: Support at 175.00 Holds the Key to Immediate Bullish Continuation

[Redator]

EUR/JPY printed a hammer candlestick yesterday just above a key support level hinting at a potential bullish continuation. The bullish daily candle close also came after three successive days in the red but today has seen price action fail to build on yesterday's momentum.

EUR/JPY has pushed lower testing the lows printed yesterday. What does the pair have in store for market participants in the coming days? Let us take a look.

Japanese Yen: Geopolitical Safety Bid vs. Domestic Instability

The Japanese Yen (JPY) is currently getting stronger, but this strength is based on fear and is likely to be temporary.

The yen's recent gains is likely because market participants are scared by the rising trade tensions between the US and China, which now includes new shipping fees and tariff threats. This global "risk-off" mood, which is also pushing gold prices to records, makes investors put money into the yen because it's traditionally considered a safe-haven.

However, this rise is unstable due to problems in Japan. The currency's gains are limited by political uncertainty following the collapse of the ruling party's coalition. More importantly, the likely new Prime Minister, Sanae Takaichi, has in the past indicated she may interfere with the Bank of Japan's (BOJ) decision to potentially hike interest rates.

Market participants think this political interference will prevent the BOJ from raising rates which is what the yen needs to get stronger. We have already seen rate hike expectations take a significant hit following the election, based on the latest LSEG data.

These developments are weighing on the Yen and may do so over the medium-term, hinting at potential gains for the Euro.

Political Instability Affecting the Euro

The euro’s path right now seems stuck because the Eurozone looks shaky.

France, for example, saw its prime minister step down, and the country is wrestling with the biggest budget deficit any Euro‑area nation has had in years. That kind of political mess may mean higher risk for investors.

Because of that the spread between French OATs and German Bunds has started to widen. In other words, lenders ask for a bigger premium to hold French debt. The market reads this as a sign that the whole bloc could be under pressure. So the euro’s ability to ride out outside shocks looks weaker, which may push the EUR/JPY pair lower.

Looking Ahead - Beyond the Data

Over the next ten days or so we have a host of data releases which could stoke volatility in EURJPY. However, many of these data releases will likely lead to short-term moves.

The political developments in France and Japan may have a bigger impact on the overall direction of the pair, especially regarding BoJ policy. Keep an eye out for any major announcement in that regard in the coming days.

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Technical Analysis - EUR/JPY

From a technical point of view, EUR/JPY is resting above a key support level which was the recent swing high around the 175.00 handle.

If this level holds there is every chance that EUR/JPY may revisit the YTD high from October 9, resting at 177.92.

A break of that handle could open up a run toward the psychological 180.00 handle and beyond.

A break of support at the 175.00 handle may open up a deeper retracement with a key level resting at 173.89 before the long-term ascending trendline and the 100-day MA which rests at 171.32 comes into focus.

EUR/JPY Daily Chart, October 15, 2025

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Source: TradingView.com

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