EUR/JPY Price Forecast: Rebounds from fresh 12-month lows to trade around 176.00

• Friday saw EUR/JPY touch 175.20, a new 12-month low.
• At 34.76, the 14-day Relative Strength Index points to moderate downward momentum rather than an extreme reading.
• At 176.98, the nine-day EMA provides the first resistance level.

Around 176.10 in Friday’s Asian session, EUR/JPY is recovering following two consecutive days of losses. The daily chart nevertheless places the cross inside a descending channel, suggesting that the bearish bias persists.

Trading below both the nine- and 50-period Exponential Moving Averages (EMAs), EUR/JPY retains a corrective tone. Together, these dynamic resistance levels continue to constrain the cross and leave the near-term outlook bearish. Meanwhile, a reading of 34.76 on the 14-day Relative Strength Index (RSI) puts it just above oversold territory, suggesting that downward momentum remains in place without being extreme.

After touching a 12-month low at 175.20 on Friday, EUR/JPY faces further support around 175.00, where the descending channel’s lower boundary lies. A break beneath this area of support confluence would clear the way towards the region of the 15-month low at 169.72.

Any recovery would first encounter the nine-day EMA at 176.98 before reaching the descending channel’s upper boundary near 178.70. Beyond that, the 50-day EMA at 179.54 offers further resistance. Clearing this medium-term moving average would trigger a bullish reversal, supporting a move towards the area around the all-time high of 187.95, set on 17 April.

Yen remains on alert as BoJ’s Himino highlights AI-driven inflation risks

An FXS Speechtracker score of 8.2/10 puts BoJ’s Himino exactly at the historical average, reflecting a consistently firm stance rather than an unexpected change of tone. His focus on robust AI-related capital expenditure and exports, higher medium- and long-term inflation expectations, and underlying inflation approaching the 2% target indicates a distinctly hawkish bias. This stands in contrast to financial conditions that remain accommodative and real interest rates that are still low.

Expectations that the Bank of Japan is moving closer to further normalisation are reinforced by the warning that delaying policy adjustments could increase upside inflation risks and harm the economy. From an FX perspective, rapid growth in bank lending, heightened inflation risks and the stated objective of securing stable prices through appropriate monetary policy favour a gradual retreat from ultra-loose settings. Provided concrete action follows, this backdrop offers modest support for the yen.

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