EUR/JPY Soars Toward Record Highs Amid Shifting Yen Narrative

The EUR/JPY currency cross has been showing a bullish bias after rebounding from the ascending channel's bottom. It is currently trading around 185.80 during Asian hours on Tuesday. The technical analysis of the daily chart indicates that the currency remains within the ascending channel pattern.

The EUR/JPY cross is holding above both the nine-day and 50-day Exponential Moving Averages (EMAs), maintaining a bullish near-term tone. The 14-day Relative Strength Index (RSI) at 59.45 suggests firm but not overstretched upside momentum.

According to Scotiabank strategists, the recent Yen narrative is evolving, shifting focus from official action to BoJ fundamentals. They note that 'the market narrative appears to be shifting from the official intervention that dominated through much of the summer,' with participants now tightening their focus on fundamentals into the September 18 BoJ meeting.

The EUR/JPY cross may test its upper boundary around 187.70, followed by the all-time high of 187.95 set on April 17. However, a break below the confluence support zone at 185.50 could cause bearish reversal, potentially pressing the currency down toward its nine-month low of 179.37.