EUR/JPY Price Forecast: Falls below 176.00 after a bullish gap opening

EUR/JPY is falling below 176.00 after a bullish gap opening, according to recent technical analysis. The currency pair has been in a descending channel pattern, displaying a persistent bearish bias. It remains under both the nine- and 50-period Exponential Moving Averages (EMAs), indicating constrained upside potential. The 14-day Relative Strength Index (RSI) of 33 suggests weak momentum, rather than outright oversold conditions.

EUR/JPY could test the 12-month low of 175.10 followed by the lower boundary of its descending channel at 175.00. Further declines may lead the pair to the 15-month low of 169.72. On the upside, the primary barrier is the nine-day EMA of 176.69, followed by the upper boundary of the descending channel near 178.60. A move above the medium-term price average would signal a bullish reversal, potentially taking EUR/JPY to the all-time high of 187.95.

Analysts at MUFG note that the Yen has been trading at stronger levels this week due to risk-off trading conditions. Deutsche Bank observes that Japan's September inflation rose as expected, moving above the Bank of Japan's target, supported by higher energy costs and yen weakness.