EUR/JPY Price Forecast: Remains below 183.00 as bearish bias prevails

The EUR/JPY currency pair remains below 183.00 amid a prevailing bearish sentiment. After modest gains in the previous day, EUR/JPY traded around 183.80 during the Asian session on Tuesday. The Relative Strength Index (14) stands at 47.63, just below the neutral 50 line, indicating persistent bearish momentum without yet hitting oversold territory.

The EUR/JPY cross exhibits a mildly bearish near-term bias as it stays under the 50-day Exponential Moving Average (EMA) while being just above the nine-day EMA. This positioning suggests the cross is ensnared between short-term support and higher resistance levels. The immediate support is found at the nine-day EMA at 183.34. If the pair breaks below the short-term moving average, it would strengthen the bearish outlook and push EUR/JPY lower towards the eight-month low of 179.37, previously hit on August 3, and then the nine-month low of 175.70.

Conversely, the EUR/JPY cross could climb towards the primary resistance near the 50-day EMA at 184.57. Should the currency pair surpass this medium-term moving average, a bullish shift could occur, enabling the pair to venture near the all-time high of 187.95, previously achieved on April 17.

BNY's Wee Khoon Chong observes a notable shift in policy expectations, with markets now assigning a 50% probability of a 25 basis points Bank of Japan rate hike in September and a full hike by year-end, highlighting the increasing belief that the BoJ will move away from its ultra-loose policy stance in the months ahead.