The EUR/JPY currency pair continues to display strong bullish tendencies, with recent movements suggesting a potential rebound toward its 12-month high of 169.86, achieved in late June. Technical indicators reinforce this outlook, as the 14-day Relative Strength Index remains just below the overbought threshold of 70, indicating sustained buying interest. The nine-day Exponential Moving Average, positioned at 168.77, serves as a key support level, underpinning the current upward momentum.
Following two days of gains, the pair experienced a slight decline during Asian trading hours, trading around 169.40. The daily chart analysis reveals that EUR/JPY remains within an ascending channel pattern, signaling continued bullish sentiment. The proximity of the RSI to 70 suggests that momentum is still strong; however, a sustained move above this level could trigger an overbought condition, potentially leading to a corrective pullback. The pair’s position above the nine-day EMA also indicates short-term strength.
On the upside, a breach above the resistance at 169.86 could open the door to testing higher levels, including the upper boundary of the ascending channel near 171.40. Confirming a breakout above this level would bolster the bullish outlook and suggest further gains in the near term. Conversely, on the downside, initial support is identified at the nine-day EMA at 168.77. A deeper correction might see the pair decline towards the lower boundary of the channel around 167.00, followed by the 50-day EMA at approximately 165.32. Falling below this level would weaken the medium-term trend and could lead EUR/JPY towards key support around 161.00, a level previously acting as resistance before being broken amid strong buying interest.
Overall, the currency pair remains underpinned by technical strength, with traders closely watching key support and resistance levels to gauge momentum shifts.
