EUR/JPY Rebounds After Seven-Day Losing Streak
The EUR/JPY pair ended its seven-day losing streak on Tuesday, trading around 177.40 during Asian hours. Technical analysis of the daily chart shows the pair remains near the lower boundary of a descending channel, suggesting it may hold support and experience a temporary rebound. However, a break below this channel could signal an acceleration in the downward momentum.
The pair maintains a bearish outlook, trading below both the nine- and 50-period Exponential Moving Averages (EMAs). It recently fell below the key support level at 175.70, shifting the price action into a corrective phase. The 14-day Relative Strength Index (RSI) stands at 29.78, indicating oversold territory, which suggests that while downside pressure remains strong, further selling may ease in the short term.
Support levels are identified at 176.60, followed by the 11-month low of 175.70 from November 2025, and the 14-month low of 169.72. On the upside, resistance levels include the nine-day EMA at 178.18, the 50-day EMA at 181.20, the upper boundary of the descending channel at 184.20, and the all-time high of 187.95 set on April 17.
Analysts at Commerzbank suggest the European Central Bank (ECB) could ease market tensions through communication before resorting to more forceful tools. They note that ECB representatives could adopt a less hawkish tone to dampen expectations of interest-rate hikes and ease pressure on government bonds. Christine Lagarde recently emphasized that rising bond yields could dampen economic growth and limit the pass-through of higher energy costs to consumers.