EUR/JPY Price Forecast: Bearish bias persists but pair holds above 176.00

• The 12-month low at 175.10 remains a potential downside target for EUR/JPY.
• At around 35.98, the 14-day Relative Strength Index points to limited upward momentum, rather than oversold conditions.
• At 176.60, the nine-day EMA provides the first resistance level.

Trading at around 176.20 in Tuesday’s Asian session, EUR/JPY is firmer for a second consecutive day. Despite these gains, the descending channel on the daily chart indicates that the cross retains a distinctly bearish bias.

With EUR/JPY trading below both its nine- and 50-day Exponential Moving Averages (EMAs), the bearish outlook remains intact. These short- and medium-term averages sit above the current price, suggesting that rebounds remain constrained. Meanwhile, a 14-day Relative Strength Index (RSI) reading of 35.98 indicates weakness and limited upward momentum, rather than outright oversold conditions.

A decline could bring EUR/JPY back to the 12-month low of 175.10 recorded on 23 October, with the descending channel’s lower boundary around 174.80 next in view. A break beneath this support confluence would clear the way towards the region of the 15-month low at 169.72.

Any recovery would first encounter the nine-day EMA at 176.60, ahead of the descending channel’s upper boundary near 178.50. Beyond that, the 50-day EMA at 179.26 offers further resistance. A break above this medium-term average would trigger a bullish reversal, supporting a move by EUR/JPY towards the area around its all-time high of 187.95, recorded on 17 April.

BoJ expected to hold at 1.25% before next tightening move

A pause at 1.25% would give policymakers time to assess the latest increase before considering another policy-rate adjustment. Brown Brothers Harriman’s Elias Haddad highlights this market expectation, noting that the Bank of Japan is “widely expected to keep rates on hold at 1.25% and assess September’s 25bps hike before tightening again,”

(The technical analysis of this story was written with the help of an AI tool. Know more.)