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EUR/JPY Price Forecast: Edges lower below 185.00, while near-term bullish bias holds
- EUR/JPY posts modest losses near 184.95 in Thursday’s early European session.
- The cross keeps a bullish near-term tone, but further consolidation cannot be ruled out amid neutral RSI momentum.
- The first upside barrier is seen at 185.00; the initial support level to watch is 184.90.
The EUR/JPY cross trades on a negative note around 184.95 during the early European session on Thursday. Eurozone inflation fell more than expected in June, easing pressure on the European Central Bank (ECB) to raise rates at its next meeting on July 23. This, in turn, could weigh on the Euro (EUR) against the Japanese Yen (JPY).
Data released by Eurostat on Wednesday showed that Eurozone inflation, as measured by the Harmonized Index of Consumer Prices (HICP), dropped to 2.8% YoY in June from 3.2% in May. This figure came in below the consensus of 3.0%.
Morgan Stanley economists said softer Eurozone June inflation could also “lower the bar a touch for the ECB to be on hold in September,” adding that energy pressures likely had a “limited” direct impact on eurozone prices.
Following Wednesday’s print, traders continued to anticipate the ECB to deliver another quarter-point rate rise by the end of this year, according to Morningstar.
Technical Analysis:
In the daily chart, EUR/JPY holds above the Bollinger Bands middle line and the 100-day moving average, keeping a mildly bullish near-term tone as price gravitates near recent highs. The Relative Strength Index (14) hovers around 50, suggesting balanced momentum and favoring a continuation of range-bound gains rather than an impulsive breakout.
On the topside, immediate resistance is located at the 185.00 psychological level, en route to the June 30 high of 185.86. The next hurdle emerges at the Bollinger Bands upper band near 186.15, where bullish attempts could meet profit-taking.
On the downside, initial support is seen at the Bollinger middle band at 184.90, followed by the 100-day moving average at 184.65; a deeper pullback would expose the lower Bollinger band support around 183.65.
