Key Moments
- EUR/JPY traded around 176.40 during Asian hours on Monday after recovering losses from the previous session.
- The cross remained below the 50-day Exponential Moving Average, with the 14-day RSI at 42.64, signaling muted bullish momentum.
- Key resistance is located near 178.00 at the top of the descending channel, while support is clustered around 176.33, 175.07, and 174.40.
Bearish Bias Intact Despite Modest Rebound
EUR/JPY edged higher during Asian trading on Monday, recouping part of the prior day’s decline and trading near 176.40. On the daily chart, the pair continues to trace out a descending channel, reflecting a clearly bearish technical backdrop.
The cross is still trading beneath its 50-day Exponential Moving Average (EMA), reinforcing a negative near-term outlook. Price action is showing only tentative stabilization, with spot levels hovering just above the nine-day EMA, currently at 176.33.
Momentum indicators are similarly subdued. The 14-day Relative Strength Index (RSI) stands at 42.64, below the neutral 50 threshold, pointing to weak upside traction rather than a convincing trend reversal.
Key Technical Levels for EUR/JPY
Market participants are closely watching a series of nearby support and resistance markers that define the current trading range within the descending channel structure.
| Type | Level | Description |
|---|---|---|
| Immediate support | 176.33 | Nine-day Exponential Moving Average |
| Secondary support | 175.07 | 12-month low recorded on October 30 |
| Channel support | 174.40 | Lower boundary of the descending channel |
| Extended downside area | 169.72 | 15-month low region if price breaks below channel |
| Initial resistance | 178.00 | Upper boundary of the descending channel |
| Medium-term resistance | 178.79 | 50-day Exponential Moving Average |
| Long-term upside target | 187.95 | All-time high reached on April 17 |
Downside Scenario: Focus on Channel Support and Multi-Month Lows
On the downside, EUR/JPY could first revisit the nine-day EMA at 176.33. A sustained move below that short-term average would bring the 12-month low at 175.07, set on October 30, into focus. Further weakness would expose the lower boundary of the descending channel near 174.40.
A clear break beneath that channel floor would mark a significant technical deterioration and could allow the pair to drift toward the region around the 15-month low at 169.72.
Upside Potential: Break Above Medium-Term Averages Needed
If buying interest strengthens, the cross could attempt to climb toward the top of the descending channel, located around 178.00. A move above that boundary would then put the 50-day EMA at 178.79 in play.
A decisive push through this medium-term moving average would constitute a bullish reversal signal and open the way for EUR/JPY to probe higher levels, including the area surrounding the all-time high at 187.95, which was reached on April 17.
Dollar Softness Amid Tech Weakness and Fed Stance
Dollar dynamics are also being influenced by broader market moves. The article notes that the Dollar has remained under pressure as technology shares sell off, even as Federal Reserve policy remains hawkish.
Brown Brothers Harriman’s Elias Haddad argues that the ongoing tech sell-off is likely to keep the Dollar under pressure in the near term, with “the USD index (DXY) likely to test support at 101.00.” However, he stresses that “strong US economic activity and rising price pressures reinforce the Fed’s hawkish bias, keeping rate differentials supportive of USD,” suggesting that any downside in the Dollar may be tempered by underlying macro and policy support.
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