Oversold Signals Flash for USD/JPY, EUR/JPY Ahead of Key Events

The USD/JPY and EUR/JPY currency pairs are flashing oversold momentum signals not seen since 2024, raising concerns about a potential near-term reversal ahead of key events.

The developments come as expectations around a potential Bank of Japan rate hike, the U.S. CPI report, and Brent crude prices moving back above $100 per barrel intensify.

In August, the global food price index rose to its highest level since late 2022, according to the Food and Agriculture Organization of the United Nations.

The USD/JPY is nearing a key technical level, the lower boundary of an uptrend channel established in 2023. The daily momentum has reached oversold levels last seen in 2024.