EUR/JPY Soars as German Economy Shows Signs of Revival

EURJPY gained sharply  as yen declines against all majors. It hits an intraday high of 169.65 and is currently trading at approximately 169.46. The short-term outlook for this pair is favorable, provided it stays above 167.60 holds.

Germany’s June 2025 Flash PMI numbers paint a picture of cautious optimism for the nation’s economic trajectory. Manufacturing, while still below the 50-point threshold at 49.0, has reached a 34-month high, suggesting that the sector’s contraction is easing and fresh orders are beginning to gain momentum. The services sector remains in negative territory at 49.4, yet the rate of decline has noticeably slowed, and new business activity is nearly stable—both positive signals compared to previous months.

Most notably, the Composite PMI—which combines the manufacturing and services indices—has climbed to 50.4. Crossing this benchmark indicates the return of overall economic expansion for the first time in several months. This development suggests that Germany may finally be emerging from its recent cycle of intermittent growth and stagnation, fostering expectations for stronger economic performance in the latter half of 2025.

Technical Analysis:

The EUR/JPY pair is trading above  55 EMA,  200 and  365-H EMA  on the 4-hour  chart.

• Near-Term Resistance: Around 170  a breakout here could lead to targets at 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 4-hour chart):
• CCI (50): Bullish
   
• Average Directional Movement Index: Bullish

Overall, the indicators suggest bullish trend

Trading Recommendation:

It is good to buy on dips around 168.50 with stop loss at 167.60 for a TP of 171/172.