The Euro (EUR) experienced broad-based weakness against major currencies during Asian trading on Wednesday, with EUR/JPY slipping below 178.00 to trade around 177.90 and EUR/USD declining 0.18% to near 1.1238 [1][2]. Technical analysis for EUR/JPY indicates a persistent bearish bias, as the pair remains within a descending channel and trades below both the nine-period and 50-period Exponential Moving Averages (EMAs). The 14-day Relative Strength Index (RSI) at 36.36 signals ongoing selling pressure, with initial support at 176.50 and further downside risk toward the 11-month low of 175.70 and the 14-month low of 169.72 [1]. Upside resistance levels are identified at the nine-day EMA of 178.25, the 50-day EMA at 181.10, and the upper boundary of the channel at 184.20, with the all-time high at 187.95 [1].
For EUR/USD, the pair is also under bearish pressure, trading below the 20-day EMA at 1.1376 and showing a series of lower closes. The RSI (14) near 25 suggests oversold conditions, which may slow further declines but do not yet signal a reversal of the bearish trend [2]. Immediate resistance is at the 20-day EMA, while a break below the fresh yearly low near 1.1160 could intensify downside momentum [2].
Market sentiment is further weighed down by macroeconomic factors, notably the French fiscal crisis, with France's debt now at 119% of GDP, which is expected to keep the Euro under pressure [2]. On the US side, the US Dollar Index (DXY) is up 0.18% above 102.00, supported by a rebound in US Treasury yields above 5.3% [2]. The upcoming release of the Federal Open Market Committee (FOMC) minutes is highlighted as a potential catalyst for further US Dollar movement, with traders watching for clues on future US interest rate policy [2].
Analysts at Rabobank note that the Bank of Japan is not expected to pursue consecutive rate hikes, suggesting that any further policy normalization will be gradual, which may influence the EUR/JPY cross [1].
CONCLUSION
The Euro remains under pressure against both the US Dollar and Japanese Yen, driven by bearish technical signals and concerns over French fiscal stability. With key support levels in focus and upcoming US monetary policy signals, traders are likely to remain cautious on the Euro in the near term.