EUR/JPY Traders Eye BoJ Decision as Bearish Bias Persists
The EUR/JPY currency cross has been experiencing a bearish bias as it trades within a descending channel pattern. This is evident from its technical analysis on the daily chart, which shows that the cross remains below both the nine-day and 50-day Exponential Moving Averages (EMAs). The Relative Strength Index (RSI) at 29.84 hovers near oversold territory, suggesting that downside pressure persists but could become stretched on further declines.
The EUR/JPY cross may find its primary support at the lower boundary of the descending channel around 177.60, and a break below this level would strengthen the bearish bias. On the other hand, if the cross rises toward the nine-day EMA of 179.73, followed by the 50-day EMA of 183.14, it could indicate a potential reversal in sentiment.
Strategists at Scotiabank observe that the Yen's underperformance versus the USD and its G10 peers appears to reflect more than just shifting risk appetite. They note that 'the relative performance suggests a focus on factors beyond sentiment, as market participants eye Friday's BoJ and its widely anticipated and fully priced hike.'