EUR/JPY remains under pressure within a descending channel, with the Japanese Yen benefiting from organic support and USD/JPY struggling to clear the 158.70 resistance level.
The Yen is described as the second best performing G10 currency in the half year to date and has recently outperformed the USD on a one-month view, with recent price action organically supportive rather than intervention-driven. This underlying strength weighs on EUR/JPY and caps USD/JPY below 158.70.
The cross trades near 177.30 after two days of gains but remains inside a descending channel below the 50-day EMA at 178.47, keeping rallies capped. Support sits at the nine-day EMA of 177.00, the October 30 low of 175.07 and the channel boundary near 174.00. The near-49 RSI suggests consolidation rather than a sharp breakdown, so the bearish tilt is mild.
Rabobank strategists note the market shows a clear reluctance to push USD/JPY above the 158.70 area, which coincides with the 200-day simple moving average. The Yen has outperformed the USD on a one-month view, arguing against upside moves in the pair.
The EUR/JPY cross maintains a bearish bias, trading around 177.30 as it remains confined within a descending channel. While the pair has seen two days of gains, it continues to face resistance from the 50-day EMA at 178.47, with the Japanese Yen showing organic strength as the second-best performing G10 currency this year.
Strategists note recent price action has been organically supportive, with the Yen the second best performing G10 currency in the half year to date, after earlier help from sizeable FX intervention over three summer days including joint support with the US Treasury.
Support lies at 177.00 (nine-day EMA), 175.07 (12-month low from October 30) and around 174.00 (channel lower boundary). Resistance is near 178.40-178.47 (channel top and 50-day EMA), with a break above opening the way toward the all-time high of 187.95.
The daily chart shows a mildly bearish bias: the cross is inside a descending channel and below the 50-day EMA, though the RSI near 49 points to consolidation rather than a strong sell-off.
Strategists point to a clear reluctance to push the pair above 158.70, a level that coincides with the 200-day simple moving average, while the Yen has outperformed the Dollar over the past month.