EURJPY Drops to Multi-Week Low After Breaking Key Support

EURJPY continued its sharp decline into the fifth consecutive day, reaching an 11-week low early Thursday with a 1% drop during the Asian session.

Recent interventions by Japanese authorities have strengthened the yen significantly, hinting at potential further gains for the currency.

Wednesday’s close below the critical support level of 166.91 (daily cloud base / Fibo 38.2% of 153.14/175.42 rally) triggered a strong bearish signal, leading to accelerated losses on Thursday.

Bearish momentum is now targeting levels at 164.28 (50% retracement) and 163.91 (200 DMA), with a breach of these levels potentially exposing 161.65 (61.8% retracement) and the psychological level of 160.

However, the current oversold conditions may prompt a pause in the bearish trend for consolidation.

Any potential rebounds should be capped below the broken pivot at 166.91, which now serves as a significant resistance, to maintain the downward pressure and set the stage for further declines.

Attention will shift to next week’s Bank of Japan monetary policy meeting on Wednesday, with recent discussions suggesting additional rate hikes could offer further support to the strengthening yen.

Res: 166.91; 167.78; 168.87; 169.01
Sup: 164.28; 163.91; 163.01; 161.65