The EUR/JPY currency pair gained ground for the second consecutive day, trading around 178.70 during Asian hours on Tuesday, despite remaining within a descending channel pattern that signals an ongoing bearish bias [1]. Technical analysis indicates the cross is maintaining a bearish near-term tone, as it continues to trade below both the nine-day and 50-day Exponential Moving Averages (EMAs). The 14-day Relative Strength Index (RSI) stands at 29.84, placing the pair near oversold territory and suggesting that while downside pressure persists, it could become stretched if declines continue [1].
Key technical levels highlighted include primary support at the lower boundary of the descending channel around 177.60, with a break below this level likely to reinforce the bearish outlook and potentially drive the pair toward the 10-month low of 175.70, recorded in November 2025 [1]. On the upside, resistance is seen at the nine-day EMA of 179.73, the 50-day EMA of 183.14, the upper boundary of the descending channel at 185.30, and the all-time high of 187.95 set on April 17 [1].
Strategists at Scotiabank note that the Yen’s underperformance against the USD and its G10 peers is being driven by factors beyond shifting risk appetite, as market participants focus on the upcoming Bank of Japan (BoJ) policy decision scheduled for Friday. The hike is described as widely anticipated and fully priced in, with investors positioning ahead of both the policy announcement and upcoming Japanese data releases [1].
In terms of broader currency movements, the Euro was the strongest against the New Zealand Dollar, while its performance against the Japanese Yen was marginal, with a -0.01% change reported for the day [1].
CONCLUSION
EUR/JPY remains under bearish technical pressure, trading near oversold levels and key support, as markets await the Bank of Japan's policy decision. The pair's near-term direction will likely hinge on the outcome of the BoJ meeting and subsequent Japanese data. Market sentiment is cautious, with investors closely monitoring technical levels and central bank signals.