NZD/USD Price Forecast: Softens below 0.5900 while remaining in near-term consolidation

As the European trading session unfolds on Monday, the EUR/JPY currency pair finds itself in negative territory, hovering around 181.20. The Japanese Yen (JPY) has been gaining strength against the Euro (EUR) due to projections from Japanese officials. Takuji Aida, an economic adviser to Japanese Prime Minister Sanae Takaichi, stated that the Bank of Japan (BoJ) is expected to raise interest rates in September and continue with bi-monthly hikes until next January.

Following the September rate hike, there could be additional increases by next January, with the BoJ reverting to hikes around every six months thereafter.

Traders are keeping a close eye on the European Central Bank (ECB) interest rate decision due on Thursday. The ECB is anticipated to increase rates by a quarter-point, bringing its deposit rate to 2.50%, according to a Reuters poll. Deutsche Bank notes that Japan's data calendar will be active next week, with key releases such as July labour cash earnings, the August Economy Watchers survey, and the PPI on Friday, providing insights into household income dynamics and upstream price pressures.

In the daily chart, EUR/JPY maintains a bearish bias, trading below the 20-day Bollinger middle band and the 100-day moving average. The Relative Strength Index (14) is just above the 30 level, indicating emerging oversold conditions but not a definitive loss of downside momentum. The currency pair's immediate resistance is the lower Bollinger band at 181.40, while the next hurdle lies at the August 10 low of 182.70, leading to the 20-day simple moving average of 184.45 and the 100-day moving average of 184.90.

On the downside, traders watch the September 4 low of 180.23 as an initial support level, with the psychological level of 180.00 posing further challenges. A breach of this level may expose the August 3 low of 179.37.