The currency pair retreats from eight-month highs, trading below key moving averages with bearish momentum dominating near-term outlook.
EUR/JPY trades around 181.50 in Asian hours, recovering slightly after three consecutive days of losses. The cross remains below both the nine-day and 50-day Exponential Moving Averages (EMAs), reinforcing a bearish near-term trend.
The 14-day Relative Strength Index (RSI) stands at 32.97, just above oversold levels, signaling persistent downside momentum. Initial support is seen at the August 3 eight-month low of 179.37, with further downside potential toward 175.70. Resistance levels are marked at 183.62 and 184.90, the nine-day and 50-day EMAs, respectively.
Recent intervention by Japan and the US to support the yen has shifted market positioning, with JPY net shorts reaching 2024 highs last week. Strategists suggest this could lead to a sharp adjustment in positioning, though fundamentals remain uncertain for sustained yen strength.