Key Moments
- EUR/JPY traded near 178.90 in Asian hours on Thursday after three consecutive sessions of gains.
- The cross continues to trade within a descending channel and below its nine- and 50-day EMAs, reinforcing a bearish bias.
- The 14-day RSI around 32 highlights persistent downside pressure, with price hovering just above oversold territory.
Technical Overview
EUR/JPY retreated during Asian trading on Thursday, slipping back to around 178.90 after posting three straight days of advances. On the daily chart, the pair remains confined within a descending channel, which continues to shape a broadly bearish technical outlook.
The cross is holding below both the nine-period and 50-period Exponential Moving Averages, signaling that short- and medium-term trends remain negative. The inability to regain these EMAs indicates that upside attempts are being constrained, with sellers stepping in on rallies.
Momentum indicators also point to ongoing weakness. The 14-day Relative Strength Index is positioned near 32, placing the pair just above oversold territory and underscoring that downside forces have yet to ease in a meaningful way.
Key Support and Resistance Levels
Immediate technical focus is on how EUR/JPY behaves around the lower boundary of the descending channel. A move lower could expose additional downside levels that have been highlighted by recent price action.
| Level | Type | Description |
|---|---|---|
| 185.10 | Resistance | Upper boundary of descending channel |
| 187.95 | Resistance | All-time high set on April 17 |
| 182.84 | Resistance | 50-day Exponential Moving Average |
| 179.53 | Resistance | Nine-day Exponential Moving Average |
| 178.90 | Spot | Trading area during Asian hours on Thursday |
| 177.40 | Support | Lower boundary of the descending channel |
| 175.70 | Support | Nearly 11-month low recorded in November 2025 |
On the downside, the first notable support is projected at the descending channel base near 177.40. A break below this level could open the way toward the next key support at 175.70, described as a nearly 11-month low registered in November 2025.
On the upside, any recovery would initially face the nine-day EMA at 179.53, with further resistance at the 50-day EMA at 182.84. A more extended rebound would bring the upper boundary of the descending channel around 185.10 into view, ahead of the all-time high at 187.95, which was reached on April 17.
Euro Volatility Around FOMC Expectations
Market attention around the Euro has also been influenced by developments in implied volatility as participants position around forthcoming Federal Open Market Committee communications.
Strategists at Scotiabank note that overnight Euro volatility has picked up ahead of the FOMC, with “overnight EUR vol has firmed modestly, implying a breakeven move in spot of about 50 pips.” They point out that this is “a bit below recent peaks,” which in their view suggests “markets may have largely priced in a hawkish Fed outcome” at this stage.
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