EUR/JPY continued its upward trajectory for the second consecutive day, trading around 162.70 during Monday’s Asian session. However, technical analysis suggests that the currency pair is testing the lower boundary of its ascending channel, indicating potential weakness in the bullish trend.
The 14-day Relative Strength Index (RSI) remains below the 50 mark, signaling a possible bearish outlook for the EUR/JPY cross. Additionally, the pair’s position below both the nine-day and 14-day Exponential Moving Averages (EMAs) points to weakened short-term momentum, further supporting the possibility of further declines.
Support and Resistance Levels for EUR/JPY
In terms of support, EUR/JPY is testing the lower boundary of the ascending channel around the 160.50 level. A break below this could reinforce the bearish bias and push the pair towards its four-month low of 156.18, reached on December 3.
On the upside, the primary resistance lies at the nine-day EMA, currently around 161.31, followed by the 14-day EMA at 161.64. A breakthrough above these levels could strengthen the bullish momentum and propel EUR/JPY towards its two-month high of 164.90.
Further resistance appears near the six-month high of 166.69, last touched in October 2024, with the psychological level at 167.00 aligning with the upper boundary of the ascending channel.
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