The Euro (EUR) demonstrated resilience against both the Japanese Yen (JPY) and the US Dollar (USD) during Asian trading hours on Friday, with notable technical and fundamental developments influencing price action. Against the Yen, EUR/JPY rebounded to trade near 181.50 after two days of losses, although it remains within a descending channel pattern, signaling a bearish near-term bias. The pair is trading below both the nine- and 50-day Exponential Moving Averages (EMAs), with the 14-day Relative Strength Index (RSI) just above 30, indicating lingering downside pressure and approaching oversold conditions. Immediate support is identified at 180.70, with a break below potentially targeting the nine-month low of 179.37 recorded on August 3. On the upside, resistance levels are noted at 183.74 (nine-day EMA), 184.56 (50-day EMA), and the upper boundary of the channel at 185.80, with a breakout potentially leading to the all-time high of 187.95 set on April 17 [1].
Strategists at Scotiabank observed a sharp rebound in the Yen against the Dollar, with the Yen up 1.5% versus the USD, fueling speculation about possible intervention by Japanese authorities if currency moves become disorderly. Despite this, the Euro was the strongest against the Japanese Yen among major currencies, as shown in the provided percentage change table [1].
In the EUR/USD pair, the Euro held onto gains around 1.1630, supported by a significant rally on Thursday following dovish remarks from Federal Reserve Governor Christopher Waller. Waller indicated a preference for holding the policy rate steady at the September meeting if August inflation data shows progress toward the 2% target, though he did not rule out a rate hike if inflation remains high. His comments that he is 'finally seeing some signs of disinflation in recent data' contributed to the US Dollar's weakness, with the US Dollar Index (DXY) trading near Thursday’s low of 99.00 [2].
Technical analysis for EUR/USD shows the pair trading above the 100-day simple moving average (SMA) at 1.1564, maintaining a mildly bullish near-term bias. The RSI at 57 suggests positive momentum without overbought conditions. Initial support is at the 100-day SMA, while resistance is at the August high of 1.1720. Investors are awaiting the release of the US Nonfarm Payrolls (NFP) data for August, scheduled for 12:30 GMT, which could further influence market direction [2].
CONCLUSION
The Euro's recovery against both the Yen and Dollar is underpinned by technical rebounds and dovish signals from the Federal Reserve, despite ongoing bearish pressures in EUR/JPY. Market participants are closely monitoring upcoming US economic data and potential intervention signals from Japanese authorities, which could shape the next moves in these major currency pairs.