During the early European trading hours on Monday, the EUR/JPY cross has gained momentum, hovering near 169.50. The Japanese Yen (JPY) has weakened following the release of weaker-than-expected Japan GDP growth figures for Q1, challenging the Bank of Japan‘s (BoJ) efforts to steer interest rates away from near-zero levels.
Maintaining its bullish momentum, EUR/JPY remains above the 100-period Exponential Moving Averages (EMA) on the four-hour chart. The prevailing sentiment suggests an upward trajectory, with the Relative Strength Index (RSI) positioned in bullish territory around 64.50.
As the cross advances, the first resistance barrier for EUR/JPY is anticipated near the upper boundary of the Bollinger Band at 169.82. Subsequently, attention shifts to the psychological round mark of 170.00, followed by a potential challenge at the all-time high of 171.60, en route to the 172.00 level.
Conversely, initial support for EUR/JPY is identified at the May 17 low of 168.78. Further downside protection is provided by the lower limit of the Bollinger Band at 167.79, followed by the 100-period EMA at 167.50, and the May 16 low at 167.33. A breach of these levels could trigger a descent towards the April 29 low of 165.66.
In summary, the EUR/JPY cross is currently driven by the weakened Japanese Yen in response to disappointing GDP data, with technical indicators suggesting a continued bullish bias. Traders are advised to monitor key support and resistance levels for potential trading opportunities.
