EUR/JPY Price Forecast: Gains traction above 185.00, bullish signals keep uptrend intact

The EUR/JPY cross gathers strength to around 185.20 during the early European session on Thursday. The Japanese Yen (JPY) softens against the Euro (EUR) amid disappointing Japanese Gross Domestic Product (GDP) data. Traders brace for Japan’s National Consumer Price Index (CPI) inflation report, which will be published on Friday. 

Japan’s economic growth in the second quarter (Q2) fell short of forecasts, with GDP expanding 0.3% versus a 0.5% growth prior. The market consensus was for 0.5%. “There were views that Japan’s economy might even slip into negative growth due to higher import prices and supply constraints driven by the aggravated Iran situation,” said Yoshiki Shinke, senior executive economist at Dai-ichi Life Research Institute.

However, growing market bets that the Bank of Japan (BoJ) could raise interest rates as early as September 2026 might help limit the JPY’s losses. Overnight index swaps are pricing in an about 80% chance of a BoJ rate hike in the next policy meeting, according to Reuters. 

Danske Bank sees scope for only one more ECB rate hike

Analysts at Danske Bank maintain a restrained view on the remaining tightening cycle, reiterating that they "continue to expect only one further 25bp rate hike from the ECB." This forecast reflects their assessment that, beyond a single additional move, the case for further policy tightening is likely to diminish.

Technical Analysis: EUR/JPY retains a bullish tone above the 100-day SMA

In the daily chart, EUR/JPY holds a bullish near-term bias as price remains above the 100-day simple moving average (SMA) and the 20-day Bollinger middle band, suggesting underlying demand on dips. The Relative Strength Index (14) around 56.75 stays comfortably above the neutral 50 line, hinting at constructive momentum while the exchange rate consolidates just under recent highs.

On the topside, immediate resistance emerges at the June 17 high of 186.32. The next hurdle is seen at the upper Bollinger Band around 187.50, which caps the current range and marks the next objective for bulls. 

On the downside, initial support aligns with the 100-day SMA at 185.10, followed by the Bollinger middle band near 184.00. A deeper pullback would expose the August 10 low of 182.70, then the lower Bollinger Band down at 180.55, where stronger buying interest is likely to appear if the broader uptrend is challenged.