The EUR/JPY currency pair encountered selling pressure around 162.35 early Thursday during the European session, as the Japanese Yen (JPY) weakened against the Euro (EUR) amid growing market expectations of further Bank of Japan (BoJ) interest rate hikes later this year.
Technically, the outlook for EUR/JPY remains constructive, with the pair holding strong above the crucial 100-day Exponential Moving Average (EMA) on the daily chart. However, short-term bearish momentum is evident as the 14-day Relative Strength Index (RSI) lingers below the midpoint at approximately 47.25, suggesting the possibility of further consolidation or a temporary pullback.
On the upside, the immediate target for the pair is 163.31, representing the high reached on May 21. Should buying interest persist, the rally could extend towards 164.46, the May 1 peak, with an additional resistance level at 164.85, the upper boundary of the Bollinger Bands.
Support-wise, the 100-day EMA near 162.00 serves as a critical technical and psychological level. A decisive break below this support could open the way to 161.40, the lower Bollinger Band limit, while the next key downside target lies at the 160.00 round figure, coinciding with the April 8 low.
Market participants will closely watch these levels as they gauge the impact of BoJ’s monetary policy outlook on the EUR/JPY pair’s near-term trajectory.
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