EUR/JPY Loses Shine: German Recession Drags Pair Lower, Bearish Outlook Prevails

EURJPY lost its shine on a weak Euro. It hits an intraday low of 170.86 and is currently trading at approximately 171.09. Intraday outlook remains bearish as long as the resistance at 172.25 holds. Short-term outlook remains bullish as long as support 167.60 holds.

Officially in a technical recession, Germany's economy has early GDP estimates indicating a -0. 1% contraction in both Q2 and Q3 2025, following a short +0. 4% growth in Q1. This confirms that Europe's largest economy still faces major obstacles in its recovery efforts this year, as initial GDP statistics reflect a -0. 1% contraction in both Q2 and Q3 2025 following a brief +0. 4% growth in Q1, suggesting ongoing economic problems driven by low industrial output, weak consumer demand, and outside pressures. This confirms that Europe's biggest economy is still struggling in its recovery efforts this year, as indicated by ongoing economic problems caused by low industrial output, weak consumer demand, and external pressures.

Technical Analysis:

The EUR/JPY pair is trading below  55 EMA,  200, and  365-H EMA  on the 1-hour  chart.

• Near-Term Resistance: Around 171.6,0, a breakout here could lead to targets at 172/172.25/172.75/173.25/174.
   
• Immediate Support: At 170.80 if breached, the pair could fall to 170/169.60/169/168.70/168.45/168.
  
  Indicator Analysis  60-min chart):
   
• CCI (50): Bearish
   
• Average Directional Movement Index: Bearish

Overall, the indicators suggest a bearish trend

Trading Recommendation:

It is good to sell on rallies around 171.58-60 with a stop loss at 172.25  for a TP of 170/169.