EURJPY breakout: Buying dips into BOJ last hike?EURJPY has broken out of a triangle consolidation on the 4-hour chart and is retesting the 182 level as support. With Japan pumping fiscal stimulus into a shrinking economy and the BOJ nearing its cycle peak, the macro setup favours buying dips for a continuation higher.
In this video, we break down why the yen remains weak despite rising yields and an imminent BOJ hike, focusing on the toxic mix of fiscal slippage and soft growth. Then, we map out the technical buy zone between 181.60 and 180.70, targeting a final fifth-wave push toward 183.40 and 185.00.
Key drivers
Japan macro: A massive ¥21.3 trillion stimulus package into a contracting economy (Q3 GDP -2.3% annualised) has spiked yields on debt concerns rather than growth, weighing on the yen.
Central bank divergence: The BOJ is expected to hike next week but signal it's near the terminal rate ("one-and-done"), while the ECB holds at 2%.
Technical structure: We are in a continuation pattern (triangle breakout) that likely marks wave 4 of a larger sequence, implying one last impulse leg higher.
Key levels: Support at 181.60 (161.8% extension of the internal wave) and 180.70 (structural pivot). Upside targets at 183.40 (138.2% extension) and 184.29–185.00 (161.8% extension).
Trade plan: Look to buy dips into the 181.60–180.70 zone with a stop below the previous low, taking partial profits at 183.40 and 184.29, and trailing the rest for a potential extension.
Trading the yen cross breakout? Share your entry levels in the comments and follow for more macro-to-technical trade setups.
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