176.50 Area: EUR/JPY Holds Above Nine-Day EMA | Price Forecast

176.33 marks immediate support at the nine-day EMA, which EUR/JPY may test.
At 42.64, the 14-day Relative Strength Index signals limited upward momentum.
Near 178.00, the descending channel’s upper boundary forms the main resistance.

EUR/JPY is trading around 176.40. The cross is advancing during Monday’s Asian session after recouping losses from the previous trading day. Despite the recovery, the descending channel on the daily chart points to a distinctly bearish bias.

Trading below the 50-day Exponential Moving Average (EMA) keeps the near-term outlook for EUR/JPY bearish. Stabilisation remains modest, with the price only just above the nine-day EMA. At 42.64, the 14-day Relative Strength Index (RSI) is below the neutral 50 threshold, suggesting muted upward momentum rather than a convincing recovery.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

At 176.33, the nine-day EMA provides the first support EUR/JPY may test. Below that sits the 12-month low of 175.07 recorded on 30 October, followed by the descending channel’s lower boundary around 174.40. A breach of the channel would leave scope for the cross to move towards the region of the 15-month low at 169.72.

A move higher could take EUR/JPY towards the descending channel’s upper boundary near 178.00, with the 50-day EMA at 178.79 the next hurdle. Clearing that medium-term moving average would trigger a bullish reversal, supporting a move towards the area around the all-time high of 187.95 recorded on 17 April.

101.00 support in focus for Dollar as tech sell-off meets hawkish Fed

101.00 is the USD index support level in focus for Brown Brothers Harriman’s Elias Haddad. He argues that continued selling in technology shares is likely to weigh on the Dollar in the near term, with “the USD index (DXY) likely to test support at 101.00.” That pressure faces a counterweight, however. Haddad emphasises that “strong US economic activity and rising price pressures reinforce the Fed’s hawkish bias, keeping rate differentials supportive of USD,” suggesting that macroeconomic conditions and policy support may limit the Dollar’s downside.

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

Euro: Key Questions

20 EU Countries: Where Is the Euro Used?

20 European Union countries use the Euro as members of the Eurozone. Globally, only the US Dollar is traded more heavily. The Euro represented 31% of all foreign exchange transactions in 2022, with average daily turnover exceeding $2.2 trillion. An estimated 30% of all transactions involve EUR/USD, making it the world’s most actively traded currency pair. Next come EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

ECB Policy: How Does It Affect the Euro?

Based in Frankfurt, Germany, the European Central Bank (ECB) serves as the Eurozone’s reserve bank, setting interest rates and directing monetary policy. Price stability is its central mandate, pursued by containing inflation or supporting growth. Adjusting interest rates up or down is its main policy tool. Higher relative interest rates, or expectations of an increase, generally support the Euro; lower rates have the opposite effect. Monetary policy is decided by the ECB Governing Council at eight meetings each year. The decision-makers comprise the heads of Eurozone national banks and six permanent members, including ECB President Christine Lagarde.

2% Inflation Target: Why Does It Matter for the Euro?

Measured by the Harmonised Index of Consumer Prices (HICP), Eurozone inflation is a key economic indicator for the Euro. A larger-than-expected rise, particularly above the ECB’s 2% target, requires the central bank to raise interest rates to regain control of inflation. When interest rates are relatively high compared with those of its counterparts, the Euro usually benefits. The higher returns make the region a more attractive destination for global investors’ funds.

Economic Indicators: What Drives the Euro?

The Euro can respond to economic releases that reveal the economy’s health. GDP, Manufacturing and Services PMIs, employment figures and consumer sentiment surveys can all help determine the single currency’s direction. Economic strength supports the Euro by attracting additional foreign investment. It may also prompt the ECB to raise interest rates, directly strengthening the currency. Weak economic readings, by contrast, are likely to weigh on the Euro. Particular attention goes to Germany, France, Italy and Spain. As the euro area’s four largest economies, they represent 75% of the Eurozone’s economy.

Trade Balance: Why Does It Move the Euro?

The Trade Balance is another important release for the Euro, recording the gap between a country’s export earnings and its spending on imports over a specified period. Strong foreign demand for a country’s exports generates additional demand for its currency as overseas buyers seek to purchase those goods, lifting its value. A positive net Trade Balance therefore supports a currency, while a negative balance has the reverse effect.