The EUR/JPY currency pair is experiencing renewed upward momentum, trading at approximately 164.30 in the early European session on Wednesday. This reflects a daily increase of 0.43%, as the pair finds support above the 100-period Exponential Moving Average (EMA) and exhibits a bullish Relative Strength Index (RSI) reading. In terms of resistance, traders are focused on the 164.55 level, while initial support is observed at 164.17.
The current trend in EUR/JPY is influenced by the lack of clarity surrounding future rate hikes from the Bank of Japan (BoJ), which has a depreciating effect on the Japanese Yen (JPY). Additionally, ongoing geopolitical tensions related to the Russia-Ukraine conflict may drive safe-haven demand, which could also impact the Yen.
Analysis using the 4-hour chart suggests that the bullish trajectory in EUR/JPY is intact, as evidenced by the price’s position above the key 100-period EMA. The RSI, positioned above the neutral level at around 57.30, points to the potential for continued upward movement in the near term.
In terms of resistance levels, the immediate focus is on the upper boundary of the descending trend channel at 164.55. A successful break above this level could lead to further gains, potentially pushing the pair towards the psychological barrier of 165.00 – 165.05, which aligns with the high observed on November 15. The next major resistance level to watch is 166.10, the peak recorded on November 6.
Conversely, should the price decline, the first line of support at 164.17 is critical. A drop below this level could lead to a test of 163.21, the low from November 8, with further downside potentially targeting 162.35 and eventually 162.15, the lower limit of the current trend channel.
