The EUR/JPY currency pair remained subdued for the third consecutive day, trading around 185.80 during Asian hours on Monday, while maintaining a constructive bullish bias by staying above both the nine-day and 50-day Exponential Moving Averages (EMAs), which now serve as dynamic support levels [1]. The 14-day Relative Strength Index (RSI) stands at 55.33, indicating bullish momentum without overbought conditions, as the pair consolidates just below recent highs [1]. Technical analysis highlights that EUR/JPY is trading within an ascending triangle, with resistance near 186.10. A decisive break above this level could trigger a bullish continuation toward the all-time high of 187.95, recorded on April 17 [1]. On the downside, key support levels are identified at the nine-day EMA (185.50), the 50-day EMA (185.12), and the ascending triangle’s lower boundary around 185.00. A break below these supports could expose the pair to further downside toward the five-month low of 181.87 (March 16) and the seven-month low of 180.81 [1].
In broader currency markets, the Euro showed minimal change against the Japanese Yen (0.00%) and the US Dollar (-0.01%) but was weakest against the New Zealand Dollar (-0.25%) on the day [1].
Meanwhile, the Swiss Franc (CHF) gained ground ahead of the release of Switzerland’s June Trade Balance data, with USD/CHF trading around 0.8070 during Asian hours on Monday [2]. The Swiss National Bank (SNB) has reiterated its readiness to intervene in the foreign exchange market to prevent excessive appreciation of the franc and to maintain price stability, as policymakers grow more cautious amid rising geopolitical tensions and heightened near-term inflation risks [2].
The US Dollar (USD) has struggled, depreciating against the Swiss Franc, despite ongoing hostilities between the United States and Iran, including the US launching its ninth consecutive night of strikes against Iranian targets. Iranian officials have stated that the ceasefire with the US has been effectively abandoned, raising the risk of disruptions to energy supply routes in the region [2].
Market expectations indicate that the Federal Reserve is likely to hold interest rates steady at its upcoming meeting, though the CME FedWatch Tool shows a 61.4% probability of a rate hike in September [2]. Fed official Hammack delivered a notably hawkish message, emphasizing that persistently high inflation remains a major concern, with the FXS Fed Sentiment Index rising by 2.06 points to 128.64, well above the neutral 100 line. This suggests that Fed communication is currently tilted toward sustained vigilance on inflation, which could limit the prospects for aggressive rate cuts and support the Dollar against peers [2].
CONCLUSION
EUR/JPY continues to show a bullish technical structure, holding above key support levels and consolidating near recent highs, while the Swiss Franc strengthens on the back of cautious SNB policy and rising inflation risks. The US Dollar faces mixed pressures from geopolitical tensions and hawkish Fed communication, with markets closely watching upcoming central bank decisions. Overall, currency markets remain sensitive to central bank signals and geopolitical developments.