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Citi analysts provided insights into the EUR/JPY currency pair’s movements, noting that the 200-day moving average has historically been a key indicator for this pair.
Currently, the 200-day line is positioned at approximately ¥162.7/€ and is expected to act as a resistance level for the ongoing rebound. Conversely, the downside risk has expanded, with the lower limit of -2σ around ¥154/€.
The currency pair’s neckline, which has been stable since last summer, is at ¥155/€. This level is significant as it represents a 38.2% retracement from the rise that began in 2022. Should the EURJPY drop below this threshold, the analysts forecast a potential decline to a 50% retracement level of around ¥150.0/€.
Furthermore, a continued pattern within the ¥155/€–¥165/€ range could result in a depreciation to ¥145/€, correlating with a 61.8% retracement. Citi analysts have observed a clear loss of long-term upward momentum for the EUR/JPY since last summer, concluding that the uptrend which started in 2020 has ended, and the pair has entered a downtrend.
If the currency pair falls below the critical neckline of ¥155/€, the downside could extend to approximately ¥150/€ over the following months, with a longer-term concern of a drop to around ¥145/€.
Additionally, the analysts highlighted potential risks from US tariffs, which could create a ceiling for the EUR/USD initially around $1.085/€, followed by a possible correction to the vicinity of $1.06/€.
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