EUR/JPY Double Top Signals Caution: Sell Rallies Amid BOJ Uncertainty

EUR/JPY Double Top Signals Caution: Sell Rallies Amid BOJ Uncertainty

EURJPY formed double top around 169.85 and showed a minor sell-off on board-based Yen buying. It hits an intraday low of 168.46 and is currently trading at approximately 168.78.The short-term outlook for this pair is favorable, provided it stays above 167.60 holds.

The Bank of Japan's Q2 2025 Tankan Survey shows a mixed outlook for business mood: while big non-manufacturers decreased somewhat to +34, reflecting lower consumer spending and growing living expenses, big manufacturers' confidence increased to +13, the highest since December and over expectations, demonstrating resiliency against worldwide headwinds. Forecasts for both industries point to a softening ahead; both non-manufacturers and manufacturers anticipate less positive conditions next quarter. Small manufacturers reported increased mood, and capital expenditure budgets by major companies are really high. While employment attitude is unfavorable, inflation expectations remain subdued. These findings open the door for careful examination at the July BOJ policy meeting.

Technical Analysis:

The EUR/JPY pair is trading below  55 EMA,  200, and  365-H EMA  on the 15-min  chart.

• Near-Term Resistance: Around 169.25, a breakout here could lead to targets at 169.85/ 170/171/172.
   
• Immediate Support: At 168.50  if breached, the pair could fall to 167.60, 166.50/ 165.95/165.55/164.50/164.
  
  Indicator Analysis  15 min chart):
• CCI (50): Bearish
   
• Average Directional Movement Index: Neutral

Overall, the indicators suggest a mixed trend

Trading Recommendation:

It is good to sell on rallies around 169   with a stop loss at 170  for a TP of 167/166.50.