The EUR/JPY cross remained in positive territory on Thursday, trading around 160.35 in early European hours, marking its fourth consecutive day of gains. The Japanese Yen (JPY) weakened after a Reuters report suggested that the Bank of Japan (BoJ) is likely to keep interest rates unchanged at its upcoming December meeting. According to an anonymous source, BoJ policymakers are cautious, preferring to closely monitor overseas risks and gather more information on wage expectations for the next year.
As market attention shifts to the European Central Bank‘s (ECB) interest rate decision later on Thursday, investors are awaiting further cues on the ECB’s stance amidst ongoing global economic uncertainty.
Technical Outlook: EUR/JPY Bullish Momentum Maintained
From a technical standpoint, the EUR/JPY cross has resumed its upward trajectory, as indicated by its recent move above the 100-period Exponential Moving Average (EMA) on the 4-hour chart. The Relative Strength Index (RSI) stands at 59.45, comfortably above the midline, suggesting sustained bullish momentum in the near term.
The immediate resistance for EUR/JPY is seen at 160.70, the high reached on December 11. A break and sustained trading above this level could pave the way for further gains toward 161.10, the upper boundary of the current ascending trend channel. A key psychological level and resistance also lies at 162.00, the high from November 26.
Support Levels: A Potential Pullback Scenario
On the downside, the 160.00 level is a critical psychological support. A breach below this level could drag the cross lower toward 159.10, the lower boundary of the ascending channel. If selling pressure intensifies, EUR/JPY could test further support at 158.65, the low from December 11.
In summary, while EUR/JPY maintains its bullish momentum, traders will closely monitor both the ECB’s interest rate decision and any further developments from the BoJ for additional market direction.
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