During early European trading hours on Tuesday, the EUR/JPY cross maintained a mild positive bias, hovering near 164.988. The Japanese Yen (JPY) faced selling pressure following dovish remarks from Bank of Japan (BoJ) policymakers. However, the prospect of intervention by Japanese authorities could potentially bolster the JPY and limit the cross’s upside movement. Investor focus remains on the upcoming European Central Bank (ECB) interest rate decision scheduled for Thursday, widely expected to keep rates unchanged at 4.5%.
From a technical standpoint, the bullish momentum of the EUR/JPY pair remains intact, with the cross trading above the 50-period and 100-period Exponential Moving Averages (EMA) on the four-hour chart. Furthermore, the Relative Strength Index (RSI) indicates bullish sentiment, residing around 66, suggesting a prevailing upside trend.
Immediate resistance for the EUR/JPY is observed at the upper boundary of the Bollinger Band, situated at 165.18. A breach above this level could pave the way for a test of the March 20 high at 165.35, with further upside potential targeting the psychological round mark of 166.00.
Conversely, initial support is found near the April 9 swing low at 164.53, followed by the 50-period EMA at 164.07. A significant support zone lies at the confluence of the 100-period EMA and the lower limit of the Bollinger Band around 163.70. A breach of this critical level may lead to a decline towards the April 5 low at 163.48.
In summary, the EUR/JPY cross maintains an upward bias, supported by technical indicators, though intervention risks and upcoming central bank decisions could influence its trajectory in the near term. Traders will closely monitor key support and resistance levels for potential trading opportunities.
