EUR/JPY Price Forecast: Falls toward 159.50 near descending channel's lower boundary

• The EUR/JPY cross may depreciate further as the daily chart analysis suggests a prevailing bearish bias.
• A corrective move could be indicated once the 14-day RSI falls below the 30 mark.
• The primary support appears at the descending channel around the psychological level of 159.00.

EUR/JPY extends its losses for the second consecutive day, trading around 159.60 during the Asian hours on Wednesday. Technical analysis of the daily chart shows the pair is moving downwards within the descending channel pattern, suggesting an ongoing bearish bias.

Additionally, the 14-day Relative Strength Index (RSI) is positioned slightly below the 30 level, confirming the bearish sentiment for the EUR/JPY cross. A dip below the 30 mark would indicate an oversold situation and direct a corrective rebound.

In terms of support, the EUR/JPY cross may find primary support at the lower boundary of the descending channel around the psychological level of 159.00, followed by a two-month low of 158.10, recorded on September 30. A break below this level could strengthen the bearish sentiment and put downward pressure on the currency cross to navigate the area around its 11-month low of 154.41, which was recorded in December 2023.

On the upside, the EUR/JPY cross may approach to test the upper boundary of the descending channel near the nine-day Exponential Moving Average (EMA) at the 161.80 level, followed by the 14-day EMA at 162.43. A decisive breach above these levels would cause the emergence of the momentum shift from bearish to bullish and support the pair to re-test a four-month high of 166.69, a level last seen on October 31.

EUR/JPY: Daily Chart