EUR/JPY Price Forecast: Softens to near 184.50, mildly bearish bias persists under 100-day SMA

EUR/JPY’s move toward 184.50 is mildly bearish rather than decisively trend-changing. The pair remains below the 100-day SMA near 185.10, keeping that average as an important near-term ceiling. However, RSI is neutral and price remains above the Bollinger middle band, suggesting limited downside momentum and a meaningful risk of consolidation rather than an immediate acceleration lower.

The fundamental bias favors the yen: markets are increasingly pricing the possibility of a Bank of Japan rate increase as early as September 2026, while political pressure to stabilize the yen and address cost-of-living concerns could reinforce expectations of tighter Japanese policy. This would narrow the interest-rate disadvantage of the yen and reduce the appeal of EUR/JPY carry positions.

The bearish interpretation would strengthen if Japanese CPI on Friday, August 21, 2026 reinforces the case for a BoJ hike, or if broader risk aversion increases demand for the yen as a safe-haven currency. A sustained break below the reported 184.10 support would expose the 182.70 area, with the lower Bollinger Band near 180.50 representing a deeper corrective reference.

The counterargument is Japan’s fiscal uncertainty. Concerns over unfunded consumption-tax changes could weaken confidence in Japanese policy and limit yen gains, while any decline in BoJ-hike expectations would remove the principal bearish catalyst for EUR/JPY. A recovery above 185.10 would therefore weaken the immediate bearish structure and shift attention toward 186.32.

Market assessment:

near-term downside risk remains modestly greater, but conviction is limited. The key drivers are Friday’s Japanese inflation data, changes in September BoJ pricing, Japanese government fiscal credibility, and global risk sentiment. Without confirmation from those factors, the technical signal is more consistent with range trading than a high-confidence directional move.