EUR/JPY Holds Bearish Bias as Pair Circles Key Technical Levels

Key Moments

EUR/JPY Technical Overview

EUR/JPY extended its decline for a second consecutive session, changing hands around 176.80 during Asian trading on Friday. The daily chart indicates that the cross continues to move within a descending channel, underscoring a prevailing bearish tone.

The pair is maintaining a soft near-term bias as price action remains below both the nine-day and 50-day Exponential Moving Averages (EMAs). With short- and medium-term EMAs positioned above spot levels, any rebound attempts appear constrained for now. At the same time, the 14-day Relative Strength Index (RSI) stands at 45.73, staying under the neutral 50 threshold and pointing to muted bullish momentum rather than a clearly oversold condition.

Key Support and Resistance Zones

On the downside, EUR/JPY may continue to slip toward initial support at the 12-month trough of 175.07, which was recorded on October 30. Below that, traders will be watching the lower boundary of the current descending channel, located around 174.00. A sustained move under this channel floor would potentially open the way for the cross to approach the region surrounding the 15-month low at 169.72.

If buying interest emerges, EUR/JPY could stage a corrective bounce back toward the first resistance level at the nine-day EMA of 176.91. Above this, the next resistance zone is seen near the upper line of the descending channel, close to the 50-day EMA at 178.59. A clear break above this medium-term moving average would signal a bullish reversal and could pave the way for the cross to revisit the area around the all-time high of 187.95, which was reached on April 17.

EUR/JPY: Daily Chart

Structural Pressures on the Japanese Yen

Yen dynamics remain influenced by underlying capital flows despite recent distortions in the relationship between the currency and interest rate differentials. Analysts at MUFG/BTMU note that recent official action has complicated the usual relationship between the Yen and interest rate differentials, with “intervention in last July / early August” having “distorted the link with rates.” However, they stress that the underlying message from the currency’s behaviour is clear: “what the movement of the yen does indicate is that there are still some structural flows that continue to weigh on yen performance and those flows could well be slow to change.” This suggests that, even as rate dynamics evolve, persistent portfolio and FDI outflows remain a key drag on JPY, and are unlikely to reverse quickly.

Euro Performance Against Major Currencies

The following table presents the percentage change of the Euro (EUR) against major currencies today. According to these figures, the Euro has been weakest versus the Japanese Yen.

The heat map reflects percentage moves among the major currencies. The base currency is taken from the left-hand column, and the quote currency from the top row. For instance, choosing Euro as the base from the left column and moving across to the US Dollar cell shows the percentage move for EUR (base)/USD (quote).