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- EUR/JPY could find the initial barrier at the upper boundary of the ascending channel around 187.00.
- The 14-day Relative Strength Index at 60.85 signals solid bullish momentum.
- The primary support lies at the nine-day EMA of 184.79.
EUR/JPY remains stronger for the second successive day, trading around 186.00 during the Asian hours on Friday. The technical analysis of a daily chart indicates that the spot is moving higher within the ascending channel pattern, signaling a persistent bullish bias.
The EUR/JPY cross is retaining a bullish near-term bias as it holds above both the nine-period and 50-period Exponential Moving Averages (EMAs). The 14-day Relative Strength Index (RSI) around 60.85 suggests constructive upside momentum rather than overbought conditions.
The primary resistance lies at the upper boundary of the ascending channel around 187.00. A break above the channel would strengthen the bullish bias and support the currency cross to explore the region around its all-time high of 187.95 set on April 17.
On the downside, the EUR/JPY cross may find the primary support around the nine-day EMA of 184.79, followed by the 50-day EMA at 184.64 and the lower boundary of the ascending channel around 184.70. A break below this confluence support zone would revive the bearish bias, potentially pressing the currency cross down toward its nine-month low of 179.37, recorded on August 3.
US Treasury move doubles buybacks and flattens the long end
Commerzbank’s FX Research team highlights the impact of the latest US Treasury announcement on the rates complex, noting that, effective 9 September, “the US Treasury will double the size of liquidity support buyback operations to at least USD4bn.” They add that the decision immediately rippled through the long end of the curve, as “the 30Y yield fell 10bp following the announcement, and the curve flattened,” reinforcing the bull-flattening move that has underpinned recent Dollar weakness and Yen strength.
