EURJPY Tumbles Over 2% in Two Consecutive Days Amid Japanese Yen Strength

The EURJPY currency pair has seen a steep fall for two consecutive days, losing over 2% of its value in Asian and European trading on Thursday. The sharp drop is attributed to the strength of the Japanese yen, which has been fueled by the hawkish narrative of Japanese officials. They point to faster BOJ rate hikes due to growing inflationary pressures, putting aside scenarios of another intervention that had previously supported the yen.

The fall has retraced a significant portion of the EURJPY's recovery leg from 179.36 to 186.02, with technical studies on the daily chart turning bearish. However, oversold conditions suggest that bears may face increased headwinds, and strong support provided by the ascending weekly Ichimoku cloud at 181.70 is expected to hold.

The current trend indicates a potential push lower, targeting psychological levels around 180.00 and the August 3rd spike low of 179.36. Upticks should be capped under 182.70 to keep bears in play.