EUR/JPY Struggles as Sellers Maintain Upper Hand Amid Shift in BoJ Policy Expectations
The EUR/JPY exchange rate is struggling to gain momentum as sellers maintain their dominance. The pair trades around 183.80 during Asian hours on Tuesday, following modest gains in the previous session.
Markets are pricing in a roughly 50% probability of a 25bp Bank of Japan (BoJ) rate hike in September and a full hike by year-end, according to BNY's Wee Khoon Chong. This shift in policy expectations has been a key factor in the recent price action.
From a technical perspective, EUR/JPY remains below the 50-day Exponential Moving Average (EMA) at 184.57, while hovering just above the nine-day EMA at 183.34. This setup indicates a mildly bearish near-term bias, with prices exposed to additional downside pressure as long as the longer-dated moving average restrains the upside.
The cross has been boxed in between immediate support and overhead resistance, leaving it vulnerable to further losses if the nine-day EMA is breached. If sellers gain control, they may target the eight-month low at 179.37 or even the nine-month low at 175.70.