The EUR/JPY rate has experienced a decline following two days of increases, currently hovering around 187.20 during Thursday’s Asian session. This currency pair is still positioned above both the 9-day and 50-day exponential moving averages (EMAs), which preserves a positive outlook in the short term. The short EMA over the long EMA further supports this upbeat sentiment.
The 14-day Relative Strength Index (RSI) sits around 64.1, indicating that while the upward momentum is robust, it’s not extreme yet. The daily chart analysis shows the EUR/JPY is trending upward within an ascending channel, which suggests a persistent bullish sentiment.
It’s possible that the EUR/JPY will encounter its first resistance near the channel’s peak at approximately 187.60. Should it break through, this could pave the way for further movement toward the record high of 187.95 achieved on April 17th.
On the flip side, key support for the EUR/JPY is identified at the 9-day EMA around 186.52. Additional support levels lie just below, including the lower edge of the ascending wedge pattern at about 185.70 and the 50-day EMA at 185.49. This creates a closely woven support zone. A significant downturn below this critical area could signal a bearish reversal and apply considerable downward pressure on the currency pair. If sellers dominate, the price could drop to the five-month low of 181.87, and further declines might aim for a seven-month low of 180.81.
Yen gains strength as markets anticipate FOMC and Bank of Japan decisions
Strategists at Scotiabank observed slight movements in the Japanese yen as it edged up only 0.1% against the dollar. It managed to surpass most G10 currencies during a largely quiet trading session, with attention directed towards the FOMC meeting set for 2 PM ET and the Bank of Japan’s policy discussion on July 31. They pointed out that the overall atmosphere remains relatively tranquil, but market positioning reflects a cautious approach as investors weigh short-term dollar fluctuations against the upcoming Bank of Japan decision.
