EUR/JPY Price Softens below 182.00 on intervention risks, bearish outlook prevails

• EUR/JPY declines to near 181.70 in Wednesday’s early European session.
• The cross keeps a negative tone, with bearish RSI momentum.
• The first upside barrier emerges at 184.90, the initial support level to watch is 181.15.

The EUR/JPY cross trades in negative territory around 181.70 during the early European trading hours on Wednesday. The Japanese Yen (JPY) strengthens against the Euro (EUR) as traders remain on alerts for further intervention from Japanese authorities following the coordinated intervention between the United States (US) and Japan.

Traders will closely monitor the developments surrounding US-Iran talks. Axios reported that the US, Iran, and Oman are closing in on an interim deal to reopen the Strait of Hormuz, with Washington aiming for a Wednesday announcement.

The source added that the agreement under discussion sets up a 60-day temporary arrangement between Oman and Iran in the critical waterway. Fresh optimism over the Middle East could improve risk sentiment and provide some support to the riskier asset, such as the EUR against the JPY.

Yen outlook seen hinging on growth rather than faster BoJ hikes

Societe Generale argues that the policy rate path alone is unlikely to deliver a sustained recovery in the Yen. Analysts there stress that “more, or faster BoJ rate hikes won’t solve the problem either, unless the Japanese growth outlook makes them appear realistic,” underscoring their view that a credible improvement in Japan’s growth prospects is a prerequisite for any meaningful policy tightening to support the currency.

Technical Analysis: Negative outlook of EUR/JPY remains intact

In the daily chart, EUR/JPY keeps a bearish near-term tone as spot holds below the 20-day simple moving average (SMA) from the Bollinger Bands and the 100-day SMA, which now act as a tight resistance cluster overhead. Price is sliding toward the lower Bollinger Band while the Relative Strength Index (14) at 34.77 stays close to oversold territory, hinting that downside pressure persists but may be approaching a fatigue zone.

On the topside, initial resistance is aligned at the Bollinger mid-line/20-day SMA near 184.90, followed by the 100-day SMA at 185.10. A decisive daily close above this level would be needed to ease the current downside bias, with the upper Bollinger Band up at 188.65 as a more distant barrier. 

On the downside, the lower Bollinger Band around 181.15 offers the first notable support, and a clear break beneath it would expose the February 12 low of 180.81, en route to the 180.00 psychological level. 

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