Key Moments
- EUR/JPY traded near 185.80 during Asian hours on Tuesday after two consecutive days of gains, remaining within a rising channel.
- The 14-day Relative Strength Index stood at 59.45, indicating solid bullish momentum without entering overbought territory.
- Major resistance is seen near 187.70 and 187.95, while key support is clustered around 185.50, 185.07, and 184.70.
Technical Outlook: Bullish Channel Intact
EUR/JPY continued to advance after two straight sessions of gains, with the cross changing hands around 185.80 during Asian trading on Tuesday. Daily chart readings show the pair trading within a well-defined ascending channel, underscoring a prevailing bullish bias.
The cross has preserved a constructive short-term technical stance by staying above both the nine-day and 50-day Exponential Moving Averages (EMAs). Momentum indicators reinforce this view, with the 14-day Relative Strength Index (RSI) at 59.45, signaling a positive trend that has not yet reached overbought conditions.
Upside Levels: Channel Top and Record Peak
As long as the ascending channel structure holds, EUR/JPY has room to probe higher levels. The immediate upside objective is located near the upper edge of the channel around 187.70. If buying pressure persists beyond that zone, attention would likely turn to the all-time high at 187.95, which was registered on April 17.
Downside Risks: Support Cluster and Reversal Threat
On pullbacks, the first area of interest is the lower boundary of the ascending channel, situated around 185.50. A deeper decline could bring the nine-day EMA at 185.07 into focus, followed by the 50-day EMA at 184.70. Together, these levels form a notable confluence of support.
A decisive break below this support cluster could signal a bearish reversal in the cross, opening the door to a more pronounced decline. Under such a scenario, EUR/JPY may be vulnerable to a move toward its nine-month low at 179.37, which was posted on August 3.
JPY Narrative Shifts Toward BoJ Fundamentals
Market attention around the Japanese Yen has been evolving, according to strategists at Scotiabank. They highlight that the earlier focus on official measures is giving way to a renewed emphasis on underlying drivers. Strategists note that “the market narrative appears to be shifting from the official intervention that dominated through much of the summer,” with participants “now tightening their focus on fundamentals into the September 18 BoJ meeting.” This shift toward fundamentals rather than intervention risk is increasingly influencing positioning in JPY ahead of the upcoming policy decision.
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