• EUR/JPY could find initial support at the lower boundary of the channel around 176.60.
• The 14-day Relative Strength Index is at 29.78, signaling potential seller exhaustion and eventual stabilization.
• The primary resistance lies at the nine-day EMA at 178.18.

EUR/JPY halts its seven-day losing streak, trading around 177.40 during Asian hours on Tuesday. Technical analysis of the daily chart shows that the currency cross is remaining close to the lower boundary of the descending channel, suggesting the price holds support and a temporary bounce. However, a break below the channel would signal accelerating downward momentum in a steeper downtrend.

The EUR/JPY cross is maintaining a bearish tone as it holds beneath both the nine- and 50-period Exponential Moving Averages (EMAs). The currency cross has recently slipped below the nearer structural floor at 175.70, turning recent price action into a corrective phase, while the 14-day Relative Strength Index (RSI) at 29.78 hovers in oversold territory, hinting that while downside pressure is strong, fresh selling could become more measured in the short term.

The initial support lies at the lower boundary of the channel around 176.60, followed by an 11-month low of 175.70, recorded in November 2025. Further support lies at the 14-month low of 169.72.

On the upside, the EUR/JPY cross may rebound and test the nine-day EMA at 178.18, followed by the 50-day EMA at 181.20. Further resistance lies at the upper boundary of the descending channel around 184.20, followed by the all-time high of 187.95 set on April 17.

ECB tone softens as Lagarde flags growth risks from rising yields

Analysts at Commerzbank argue that the ECB has scope to ease market tensions through communication before resorting to more forceful tools. They note that, despite elevated inflation, ECB representatives could “adopt a less hawkish tone in their public comments, thereby dampening expectations of interest-rate hikes and easing pressure on government bonds.” In their view, Christine Lagarde’s recent appearance before the European Parliament’s Committee on Economic and Monetary Affairs already points in this direction, as she stressed that “the sharp rise in bond yields would dampen economic growth and limit the pass-through of higher energy costs to consumers,” signalling greater sensitivity to the impact of tighter financing conditions.

(The technical analysis of this story was written with the help of an AI tool. Know more.)