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EUR/JPY Price Forecast: Softens to near 178.50, retains bearish bias despite oversold RSI

September 9, 2026

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EUR/JPY weakens to around 178.50 in Wednesday’s early European session.
The cross keeps a bearish vibe below the 100-day SMA, but a temporary recovery cannot be ruled out amid an oversold RSI.
The first upside barrier emerges at 179.00; the initial support level is seen at 177.17.

The EUR/JPY cross trades in negative territory near 178.50 during the early European trading hours on Wednesday. The Japanese Yen (JPY) edges higher against the Euro (EUR) as a slew of hawkish comments from the Bank of Japan (BoJ) policymakers have cemented views that the BoJ will raise interest rates this month.

BoJ board member Hajime Takata said last week that the central bank could take a more aggressive approach than expected. Takata further stated that a 25-basis-point hike “is not necessarily set in stone,” and that generally speaking, back-to-back rate hikes would be a possibility, too.

The BoJ is set to raise its policy rate to 1.25% from the current 1.0% at its September policy meeting, signaling an acceleration in the pace of rate hikes. This would raise the interest rate to its highest level in about 31 years and follow a rate hike in June.

Yen funding role questioned as rising JGB yields unsettle cross-border flows

Strategists at Rabobank argue that the “clear problem relates to the use of the JPY as a funding currency,” with markets now asking “whether there is room for the recent rapid unwind of JPY shorts to accelerate nearterm.” They add that an “appreciating JPY would bring fresh uncertainly over whether domestic Japanese investors would have less incentive to look for opportunity abroad,” a debate that has been sharpened by the rise in JGB yields, which has “already made this a topical theme.” Rabobank also notes that “the market has suspected that the US Treasury has been worried about large Japanese insurers potentially selling US government debt for JGBs for some time,” underscoring how shifts in Japan’s rate environment could reverberate through global fixed income positioning.

Technical Analysis: EUR/JPY keeps a bearish vibe amid oversold RSI

In the daily chart, EUR/JPY extends its corrective slide and holding decisively below key moving averages, which keeps the near-term bias firmly bearish. Price is lodged beneath the 20-day simple moving average (the middle Bollinger band) and the 100-day simple moving average, underscoring a market that remains capped by medium-term trend resistance. The Relative Strength Index (14) has dropped to around 22, deep in oversold territory, hinting that while downside pressure persists, the selloff could be at risk of fatigue if sellers fail to press decisively lower.

On the topside, initial resistance is seen at the lower Bollinger band near 179.00, with a recovery above this barrier needed to ease immediate selling pressure. Further up, the next hurdle is located at the 180.00 psychological level, en route to the Bollinger mid-line at 183.82 and the 100-day SMA at 184.70.

On the flip side, the November 10, 2025 low of 177.17 acts as an initial suppot level for the cross. Any follow-through selling below this level could pave the way to the November 4, 2025 low of 176.09, followed by the October 21 low, 2025 of 175.35.