EUR/JPY Slumps Below 179.00 as Bearish Bias Persists

The EUR/JPY currency cross has declined after three days of gains, trading around 178.90 during Asian hours on Thursday.

A technical analysis of the daily chart shows that the EUR/JPY is trading within a descending channel, which keeps the overall bearish bias.

The currency cross's failure to reclaim both the nine- and 50-period Exponential Moving Averages (EMAs) suggests rallies are being capped. The 14-day Relative Strength Index (RSI) around 32 hints at lingering downside pressure.

Scotiabank strategists note that overnight Euro volatility has picked up ahead of the FOMC, with a breakeven move in spot of about 50 pips expected. They point out that this is 'a bit below recent peaks,' which implies 'markets may have largely priced in a hawkish Fed outcome' at this stage.