The EUR/JPY currency pair has depreciated after two consecutive days of gains, trading around 182.10 during Asian hours on Thursday, reflecting a prevailing bearish bias in the near term [1]. The cross remains below both the nine-day and 50-day Exponential Moving Averages (EMAs), with the 14-day Relative Strength Index (RSI) at approximately 37, indicating persistent but not extreme downside momentum following the latest pullback [1]. Technical analysis suggests that EUR/JPY may retest its initial support at the eight-month low of 179.37, reached on August 3, with further support at the nine-month low of 175.70 [1]. On the upside, resistance is seen at the nine-day EMA of 183.16 and the 50-day EMA of 184.71, with a potential bullish emergence if the cross advances above these levels, possibly targeting the all-time high of 187.95 recorded on April 17 [1].
Strategists at BNY Mellon note that recent Eurozone data, particularly the latest PMIs, have generally surprised to the upside, tempering immediate stagflation fears and demonstrating resilience in the region's economy [1]. However, they caution that this resilience does not warrant fresh tightening by the European Central Bank (ECB), warning that another rate hike could risk turning a nascent recovery into a policy-induced slowdown for the Eurozone economy and regional assets [1].
In terms of daily performance, the Euro was the weakest against the US Dollar, with a percentage change of -0.05% [1]. The currency also showed minor losses against the Japanese Yen (-0.03%) and British Pound (-0.02%), while posting small gains against the Canadian Dollar (0.09%) and Australian Dollar (0.09%) [1].
No explicit market reactions or analyst forecasts regarding the EUR/JPY pair's future direction were provided beyond the technical outlook and BNY Mellon's policy commentary [1].
CONCLUSION
EUR/JPY is exhibiting a bearish bias, with technical indicators pointing toward further downside and key support levels in focus. Eurozone economic resilience has tempered calls for additional ECB tightening, but strategists warn of risks to recovery if policy becomes too restrictive. The Euro remains weak against major currencies, particularly the US Dollar, reflecting cautious sentiment in the market.