EUR/JPY Price Forecast: Trades around 176.00 near nine-day EMA

EUR/JPY experiences a decline after a slight uptick the day before, settling near 175.90 during Asian trading hours on Thursday. Technical analysis of the daily chart reveals a noticeable bearish trend, as the currency pair trades beneath both the nine- and 50-day Exponential Moving Averages (EMAs). The short-term EMA is positioned below the longer one, amplifying the downward momentum.

The 14-day Relative Strength Index (RSI) of around 35 indicates weak momentum that is inching towards oversold territory but has not yet arrived. EUR/JPY could descend towards the 12-month low of 175.10, achieved on October 23, followed by the lower edge of its descending channel at approximately 174.60. Should prices dip further below this support area, the currency pair might venture into the vicinity of the 15-month low of 169.72.

On the bullish side, the primary hurdle is the nine-day EMA at 176.32, with the upper boundary of the descending channel near 178.20 presenting another resistance level. Overcoming this medium-term average could trigger a reversal, allowing EUR/JPY to explore the region surrounding the all-time high of 187.95, which was reached on April 17.

Rabobank analysts note the improving performance of the Japanese Yen within the G10 currency complex, emphasizing that the JPY is the second-best performer in the half-year period and the fourth-best performer year-to-date. However, they caution that this resilience might not be entirely organic, as significant FX intervention in favor of the JPY has been a notable factor supporting its strength this year.