EURJPY Rally into Resistance Could Trigger Another Breakdown

EURJPY remains under bearish pressure as institutional flows and higher timeframe structure continue to favor downside continuation. While the ECB maintains a higher nominal interest rate than the BOJ, the traditional Euro carry advantage is beginning to weaken as Eurozone inflation cools and Japan continues its path toward monetary normalization. At the same time, safe-haven demand and persistent inflation concerns in Japan are helping support the Yen.

Institutional positioning further strengthens the bearish narrative.
Recent COT data shows large speculators reducing long Euro exposure while aggressively covering historic Yen short positions. This shift suggests professional money is becoming increasingly cautious on Euro strength, particularly at major resistance zones.

Technical overview:
• Weekly structure is consolidating near multi-year highs within a broader distribution range
• Strong institutional resistance continues to cap price between 187.00–187.50
• Daily structure is showing signs of topping formation beneath key moving averages
• Recent rejection from the 186.30 resistance shelf confirms active selling pressure
• H4 market structure remains bearish after breaking below the 185.80 consolidation floor
• Fresh supply is positioned between 185.95–186.30

The recent bounce appears corrective in nature, offering a potential opportunity for sellers to re-enter at premium pricing.

Trade Plan:
Order Type: Sell Limit
Entry: 186.10
Stop Loss: 187.15
TP1: 184.20
TP2: 182.50

As long as price remains below the major weekly resistance zone, the broader bearish structure remains intact. A reaction from the H4 supply area could open the path toward lower liquidity targets and a deeper rotation into weekly demand.