FX.co ★ PipsHunter99 | EUR/JPY

Technical and Fundamental Analysis of the EUR/JPY Pair EUR/JPY remained under pressure for a seventh consecutive trading session, trading around 176.40-176.50 during Monday's European session. The extended decline has pushed the pair toward the lower boundary of a descending channel on the daily chart, making the current area increasingly important for the next directional move. A sustained defense of the channel floor could trigger a short-term technical rebound toward the upper portion of the formation. However, a decisive break below the channel support would signal that bearish momentum is accelerating and could expose the pair to deeper losses. The weaker euro could improve the competitiveness of European exports in global markets, but it also raises the cost of imported goods and energy. This creates a complicated policy backdrop for the European Central Bank (ECB), particularly as policymakers remain alert to the inflationary risks associated with renewed energy-market disruptions. Investors will therefore pay close attention to comments from ECB Chief Economist Philip Lane, scheduled for later in the European session. The Japanese yen continues to benefit from its defensive appeal as investors monitor political and economic developments in Japan. Prime Minister Sanae Takaichi indicated that the government would closely assess economic, fiscal and financial conditions, including interest rates, insurance costs and market developments, as borrowing costs rise. Japanese government officials have also outlined plans to strengthen confidence in economic policy and prepare a longer-term investment strategy. These developments come as Japan's borrowing costs move toward historically elevated levels, keeping monetary policy and fiscal strategy firmly in focus. Meanwhile, Japan's consumer confidence index edged lower to 35.4 in September from 35.5 in August, although the reading was slightly better than the market expectation of 35.3. While the decline was modest, the data suggests that household sentiment remains subdued. The euro is also facing pressure from renewed uncertainty in European markets. French political and fiscal concerns have increased demand for traditional safe-haven currencies, including the Swiss franc, while investors continue to monitor euro-area growth and inflation risks. Upcoming economic releases, including Swiss inflation and second-quarter growth data, may further influence broader European currency sentiment. On the daily chart, EUR/JPY is testing the lower boundary of a descending channel near 176.40-176.50. The pair remains well below the 20 SMA around 179.00-179.10 and the 50 SMA near 181.70, confirming a firmly bearish structure. Both averages remain above price and are acting as dynamic resistance. On the H4 timeframe, price is also trading below the declining 20 and 50 SMAs. The main supply zone is positioned around 177.50-178.50, where previous selling emerged around session highs and consolidation areas. This region also aligns with intermediate resistance from the descending channel, making it a significant barrier for any recovery attempt. H4 demand is concentrated around 176.40-176.70, close to the current lows and the lower channel boundary. The daily RSI near 27 indicates heavily stretched downside momentum, increasing the possibility of temporary oversold rebounds. However, if the channel floor fails, the next major reference point comes around the 175.70 November 2025 low. On the H1 chart, EUR/JPY remains below both the 20 SMA and 50 SMA, keeping short-term momentum firmly bearish. Immediate supply has developed around 177.00-177.80, where intraday rejection and previous range highs have repeatedly limited rebounds. Immediate horizontal support is located around 176.30-176.50, with the broader 176.40-176.70 demand cluster offering the first line of defense. A decisive break below this region would strengthen the bearish outlook and expose the 175.70-176.00 area, with the November 2025 low near 175.70 acting as an important longer-term reference. On the upside, resistance begins around 177.00-177.80, followed by the stronger 177.50-178.50 supply zone. A sustained recovery above 178.50 would be needed to ease the immediate bearish pressure, while the daily 20 SMA around 179.00-179.10 represents a much stronger dynamic barrier. As long as EUR/JPY remains below the declining moving averages and inside the descending channel, the path of least resistance remains lower. A hold above the channel floor could produce a corrective bounce, but a confirmed daily break below it would signal a potential acceleration of the broader downtrend.