EUR/JPY Plunges Amid Bearish Bias as Key Resistance Levels Come into Play

The EUR/JPY currency cross has taken a downturn, dipping to near 182.00 on Thursday during Asian hours. This depreciation comes after two days of gains and is being driven by a prevailing bearish bias.

The cross is currently trading below both its nine-day and 50-day Exponential Moving Averages (EMAs), which are acting as key resistance levels. The 14-day Relative Strength Index (RSI) of around 37 also suggests persistent but not extreme downside momentum.

The next major support level for the EUR/JPY cross is at its eight-month low of 179.37, reached on August 3. Further down, there's a nine-month low of 175.70.

However, strategists at BNY Mellon are cautioning against any fresh ECB tightening measures. They argue that recent data show ‘growth defies gloom,’ with Europe’s latest PMIs pushing back against immediate stagflation fears. But they also warn that another hike could turn a nascent recovery into a policy-induced slowdown for the Eurozone economy and regional assets.