EUR/JPY Extends Sharp Decline as Bearish Momentum Accelerates
EURJPY remains under heavy pressure, extending its steep selloff into a second consecutive session, with the pair down 1.3% during Thursday’s Asian and European trading hours and posting cumulative losses of more than 2%.
The Japanese yen continues to draw support from increasingly hawkish comments by Japanese officials, reinforcing expectations for a faster pace of Bank of Japan rate hikes amid mounting inflationary pressures. Meanwhile, market participants have largely dismissed the likelihood of another currency market intervention after the yen surrendered most of the gains triggered by the late-July intervention.
The latest downturn has accelerated sharply, retracing more than 61.8% of the 179.36 to 186.02 recovery leg, with the focus now shifting to the 180.93 Fibonacci 76.4% retracement level.
Daily chart indicators have turned decisively bearish, although deeply oversold conditions may slow the pace of the decline and increase the risk of near-term consolidation.
Strong support at 181.70, marked by the top of the ascending weekly Ichimoku cloud, is expected to provide a significant barrier to further downside. This level successfully contained selling pressure in early August and could once again trigger a period of consolidation or a limited corrective rebound.
However, the formation of two large bearish daily candles continues to weigh heavily on the near-term outlook, keeping the downside bias intact and supporting expectations for another leg lower toward the psychological 180.00 level, followed by the August 3 spike low at 179.36.
Any recovery attempts should ideally remain capped below the 182.70 zone, where the broken 50% Fibonacci retracement now acts as resistance, to keep bearish pressure firmly in place.
Res: 181.90; 182.70; 183.48; 184.26
Sup: 181.30; 180.93; 180.00; 179.36
