EUR/JPY held firm for a second consecutive session, hovering around 186.00 during early Asian trading on Friday. Technical indicators on the daily chart suggest the pair continues to ascend within an established ascending channel, underscoring sustained bullish sentiment.
The cross remains above key short- and medium-term moving averages, specifically the 9-period and 50-period Exponential Moving Averages (EMAs), reinforcing the positive near-term outlook. The 14-day Relative Strength Index (RSI) at approximately 60.85 reflects healthy upward momentum, indicating room for further gains without signaling overbought territory.
Immediate resistance is seen near the upper trendline of the ascending channel around 187.00. A decisive break above this level could bolster the bullish case and pave the way for a test of the all-time high of 187.95 reached on April 17.
On the flip side, downside risks remain limited unless the pair drops below key support levels clustered around the 9-day EMA at 184.79, the 50-day EMA at 184.64, and the lower boundary of the ascending channel near 184.70. Breaching this confluence may trigger a shift in momentum, opening the door for a potential decline toward the nine-month low of 179.37 marked on August 3.
US Treasury Move Doubles Buybacks, Flattens Long End of Curve
According to Commerzbank’s FX Research team, the recent announcement by the US Treasury will significantly impact the rates market. Effective September 9, the size of liquidity support buyback operations will double to at least $4 billion, a move that immediately affected long-term yields. The 30-year yield dropped 10 basis points post-announcement, contributing to a flattening of the yield curve and aligning with a broader bull-flattening trend that has recently supported dollar weakness and yen strength.
(The technical analysis of this story was written with the help of an AI tool. Know more.)