EUR/JPY Experiences Slight Decline

After a modest rise the previous day, EUR/JPY is trading lower, hovering around 177.90 during the Asian trading session on Wednesday. A look at the daily chart indicates that this currency pair remains within a downward-sloping channel, which hints at a prevailing bearish sentiment.

The near-term outlook for EUR/JPY stays bearish as it trades below both the nine-period and 50-period Exponential Moving Averages (EMAs). With the short-term EMA positioned beneath the longer one and prices constrained below this range, any rallies appear to be merely corrective. Additionally, the 14-day Relative Strength Index (RSI) sitting at 36.36 suggests that the selling pressure is still very much in play, even as it stabilizes from last week’s low points.

Initial support for the currency pair is at the lower boundary of the channel, around 176.50, with a subsequent level of support at an 11-month low of 175.70 noted in November 2025. A drop below this crucial support zone could potentially expose further downside to the 14-month low of 169.72.

If the pair manages to move upwards, it may aim for the nine-day EMA at 178.25, followed by the 50-day EMA at 181.10. Additional resistance can be found at the upper edge of the descending channel, near 184.20, and further up at the all-time high of 187.95 reached on April 17.

Bank of Japan’s Stance on Rate Hikes

Analysts from Rabobank point out that, although the Bank of Japan is moving towards stabilizing inflation around its 2% target, it is still not seen as being ready for consecutive rate hikes. This sentiment highlights that any further adjustments in policy by the BoJ are anticipated to occur gradually rather than through a series of quick changes.