EUR/JPY Price Forecast: Trades near 178.50 after rebounding from descending channel bottom

Market impact: mildly bearish, but vulnerable to a short-term corrective rebound.

EUR/JPY remains below its nine- and 50-day EMAs and inside a descending channel, keeping the broader technical structure negative. The rebound from the channel floor near 177.70 is therefore better interpreted as a potential oversold bounce than as confirmed trend reversal. The RSI near 26.98 supports the risk of temporary short covering, while 180.00 and then 183.33 represent progressively stronger tests of whether buyers can regain control.

The key downside risk is a decisive break below 177.70. That would invalidate the current rebound structure and expose the cross to the region around 175.70, increasing pressure on the euro against the yen. Such a move would likely require renewed yen strength—potentially from more hawkish Bank of Japan expectations, higher Japanese yields, or reduced carry-trade risk appetite. FXStreet also highlights persistent hawkish rhetoric from Japanese officials ahead of the BoJ meeting, which creates a fundamental backdrop favoring the yen.

The bullish interpretation is that oversold conditions and support defense could extend a recovery toward 180.00. However, unless EUR/JPY breaks and holds above the short- and medium-term moving-average resistance, that recovery would remain corrective. A move toward the channel ceiling near 185.50 would require a material improvement in euro sentiment, a reduction in BoJ tightening expectations, or a broader return to carry-seeking risk appetite.

Trading relevance:

the immediate bias is mixed-to-bearish, with elevated reversal risk because the pair is oversold. Traders should monitor the 177.70 support, price behavior around 180.00, Japanese official commentary, BoJ policy expectations, EUR/USD direction, and broader risk sentiment. The article is primarily technical rather than a new macroeconomic catalyst, so sustained direction is likely to depend more on central-bank repricing and follow-through than on the rebound itself.