EUR/JPY Holds Key Support as Bears Control Wider Trend

Key Moments

Technical Overview: Mild Recovery Within a Bearish Structure

EUR/JPY is advancing for a second straight session, changing hands near 177.30 during Asian trading on Tuesday. Despite the latest bounce, the daily chart shows the cross still moving inside a descending channel, pointing to an underlying bearish technical bias.

The pair continues to trade beneath its 50-day Exponential Moving Average (EMA), signaling that medium-term sellers retain control. At the same time, price is holding above the nine-day EMA, which is acting as immediate support. This mix of factors suggests that while downside pressure persists, short-term dips may be cushioned by nearby support.

The 14-day Relative Strength Index (RSI) is hovering around 49, indicating neither overbought nor oversold conditions and aligning with a consolidation phase rather than a strong directional impulse.

Key Technical Levels: Support and Resistance Map

On the downside, traders are watching several support levels clustered below current prices. The first notable floor is the nine-day EMA at 177.00. Below that, attention turns to the 12-month low at 175.07, which was registered on October 30. A further decline would bring the lower boundary of the descending channel, near 174.00, into view.

If EUR/JPY were to break decisively beneath this channel floor, it would expose the region around the 15-month low at 169.72 as a next potential target area.

On the topside, immediate resistance stands near the upper boundary of the descending channel around 178.40. This level is closely aligned with the 50-day EMA at 178.47, creating a key technical band that could determine whether the current recovery extends or stalls.

A sustained move above the 50-day EMA would be a notable bullish signal, suggesting a possible trend reversal and opening scope for EUR/JPY to probe higher levels, including the area surrounding the all-time high of 187.95, reached on April 17.

EUR/JPY – Daily Chart Levels

JPY Performance: Support from Intervention and USD/JPY Technical Barrier

Beyond the EUR/JPY cross, broader moves in the Japanese Yen remain in focus. Strategists at Rabobank point out that the Yen has been a strong performer in the G10 FX space this year, supported initially by official action and more recently by market dynamics.

They note that “the JPY is the second best performing G10 currency in the half year to date.” According to their assessment, this performance has “been obtained with the support of sizeable FX intervention over 3 days during the summer, which included joint support with the US Treasury,” although they emphasize that recent trading has been less dependent on direct official support.

Rabobank highlights that “the JPY has managed to outperform the USD on a 1-month view,” and that there is “a clear reluctance to push USD/JPY above the 158.70 area which coincides with the 200-day sma,” underscoring the importance of that zone as a technical ceiling for the pair.