The EUR/JPY rebound continues while the market awaits a break above 170.00

• The EUR/JPY negotiates about 170.00, its highest level since July 2024, on Friday.
• The weak economic data of Japan and the stable posture of the BOJ undermine Yen’s demand.
• The euro remains firm despite a drop in the economic feeling of the Eurozone.

The Euro (EUR) is strengthened against Japanese Yen (JPY) on Friday, with the EUR/JPY torque rising to levels not seen since July 2024. The crossing is driven by a combination of strong demand for the euro and persistent weakness of the Yen, since the divergent monetary policy perspectives between the European Central Bank (ECB) and the Bank of Japan (BOJ) continue to drive the trend.

At the time of writing, the EUR/JPY is negotiated just below the psychological level of 170.00, around 169.70 during the American session. The torque has left a narrow consolidation range seen in the early week, where it remained largely limited between 168.20 and 169.00 from Monday to Thursday. Friday’s upward movement is fed by weak Japanese economic data and a sustained strength of the euro, in the midst of a greater appetite due to the American risk and an American dollar (USD) after mixed macroeconomic data of the US and renewed political pressures on the Federal Reserve (Fed).

New Japanese economic data published earlier on Friday added to the weakness of YEN. Tokyo’s consumer price (CPI) index for June rose 3.1% year -on -year, a decrease with respect to the 3.4% increase in May. In addition, basic consumer prices rose 3.1% year -on -year in June, decreasing from a gain of 3.6% in May and being below the 3.3% forecast. This marked the first deceleration in the underlying inflation since February, although the rhythm remains well above the 2% target of the Bank of Japan. Meanwhile, retail sales grew by 2.2% in May, below 3.5% reviewed upwards in April and below the expected 2.7%, suggesting weakening in consumer demand. Japan’s unemployment rate remained unchanged at 2.5% during the third consecutive month, aligning with forecasts but offering little support to YEN.

Meanwhile, the Eurozone data offered a mixed image. The consumer indicator of the Eurozone was located at -15.3 in June, without changes compared to May and in line with preliminary estimates, suggesting that the feeling of households remains fragile. The economic feeling indicator (ESI) fell to 94.0 from 94.8 in May, failing to meet the market expectations of a slight improvement to 95.1. Although the data point to a confidence contained throughout the region, they did little to affect the impulse of the euro in the day.

From a technical perspective, the EUR/JPY is negotiated within a well -defined ascending channel, with the pair around the upper border around 169.75. The upward trend is firmly intact, supported by a strong series of growing maximums since the beginning of June. The 21 -day exponential (EMA) mobile average, currently in 166.86, continues to act as a dynamic support, reinforcing the short -term upward trend. The Relative Force Index (RSI) has entered into the territory of Overcompra, standing at 71.08, suggesting a strong impulse but also warns about possible risks of exhaustion or short -term setbacks. Meanwhile, the indicator of convergence/divergence of mobile socks (MACD) is firmly maintained in bullish territory, with the divergence of the signal line expanding, which further confirms the ascending impulse. A daily closure sustained above the barrier of 170.00 could open the door to a movement towards the maximum of July 2024 about 171.00, while any corrective fall could find initial support in 168.20, followed by the EMA about 166.86.