• EUR/JPY holds steady near 184.75 in Thursday’s early European session. 
• The cross keeps a neutral outlook, while RSI momentum hovers around the midline. 
• The immediate resistance level emerges at 185.00; the initial support level to watch is 184.32. 

The EUR/JPY cross trades on a flat note around 184.75 during the early European session on Thursday. Markets remain cautious over further currency intervention after Japanese Finance Minister Satsuki Katayama stated that the official is prepared to take action at any time against excessive FX volatility. 

The stronger-than-expected Japanese Gross Domestic Product (GDP) growth for the first quarter (Q1) might support the Japanese Yen (JPY) and act as a headwind for the cross. Japan’s Q1 GDP beat forecasts, growing at an annualized rate of 2.1% against the estimated 1.7%.

On the other hand, hawkish comments from the European Central Bank (ECB) policymakers could lift the Euro (EUR) against the JPY. ECB policymaker Joachim ‌Nagel said on Tuesday that the central bank may have to act at its June meeting as the Iran energy shock proves persistent and the probability of broader inflation spreading continues to rise.

The majority of economists from the Reuters poll, around 85%, indicated that the ECB would raise its deposit rate by 25 basis points (bps) to 2.25% in June, up from just over half expecting that before the April meeting.

Technical Analysis:

In the daily chart, EUR/JPY is consolidating in a sideways tone, holding above the 100-day simple moving average (SMA) while trading just under the 20-day Bollinger mid-line, which keeps the immediate bias broadly neutral after the recent pullback from the highs. The Relative Strength Index (RSI) at 47 is hovering around the midline, hinting at a lack of directional conviction rather than strong selling pressure.

On the topside, initial resistance is located at the Bollinger mid-band around 185.00, with a stronger cap emerging at the May 12 high of 185.46 if bulls regain traction. The next hurdle to watch is the upper Bollinger band near 187.15. On the downside, the 100-day SMA at 184.32 offers first support, ahead of the May 7 low of 183.50. The critical support level is seen at the lower Bollinger band around 182.88, where a sustained break would likely expose a deeper correction.

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