EUR/JPY Price Forecast: Moves below confluence support zone around 177.00

• EUR/JPY hovers around the psychological level of 177.00.
• The 14-day Relative Strength Index is nearing the 50 mark, signaling a weakening bullish bias.
• The initial barrier lies at the nine-day EMA of 177.29.

EUR/JPY depreciates by more than 0.25% after remaining flat in the previous session, trading around 176.80 during the European hours on Tuesday. The technical analysis of the daily chart suggests a potential for a bearish shift as the currency cross has moved below the lower boundary of the ascending channel pattern. Traders await further price action for bearish confirmation while remaining cautious of a potential bear trap.

The short-term price momentum is weaker as the EUR/JPY cross is positioned below the nine-day EMA. However, the 14-day Relative Strength Index (RSI) is falling toward the 50 mark, indicating weakening of a bullish bias, though remaining active. Further declines would likely offer bearish confirmation.

A successful break below the confluence support zone around the psychological level of 177.00 would cause the emergence of a bearish bias and put downward pressure on the EUR/JPY cross to test the 50-day EMA near 175.06, aligned with the crucial support level of 175.00. Further declines below this crucial support zone would reinforce the bearish bias and prompt the currency cross to navigate the region around the nine-week low of 172.14, which was recorded on September 9.

On the upside, the EUR/JPY cross may test the immediate barrier of nine-day EMA at 177.29 to re-enter the ascending channel, potentially reviving the bullish bias and paving the way toward the all-time high of 178.82, reached on October 30. A successful breach above this confluence resistance area would support the currency cross to explore the region around the upper boundary of the ascending channel around 185.10.

EUR/JPY: Daily Chart