The EUR/JPY currency pair continues its upward momentum, reaching approximately 160.35 during early trading on Thursday, reflecting a daily increase of 0.15%. This performance marks the fourth consecutive day of gains, with the pair successfully trading above the significant 100-period Exponential Moving Average (EMA) and displaying bullish indicators on the Relative Strength Index (RSI). Traders are currently eyeing a key resistance level at 160.70 while watching the psychological support at 160.00.
The recent movements can be attributed to a weakening of the Japanese Yen, prompted by reports indicating that the Bank of Japan may opt to maintain its interest rates steady during the upcoming December meeting. Analysts suggest that policymakers are inclined to take additional time to assess international risks and evaluate the wage outlook for the forthcoming year. This atmosphere of caution may influence market dynamics as traders prepare for significant economic data releases.
From a technical perspective, the uptrend on the 4-hour chart appears robust, with the price maintaining its position above the crucial 100-period EMA. The RSI, currently positioned near 59.45, reinforces the bullish sentiment among traders, pointing towards potential further gains in the near term.
Should the pair sustain its move above the immediate resistance level of 160.70, this could open the door for a rise towards 161.10, which represents the upper boundary of the ongoing ascending trend channel. The next resistance target is set at 162.00, marking the high from late November.
Conversely, if the pair falls below the critical support level of 160.00, it may trigger a downward move towards 159.10. A significant breach beneath this level could escalate declines, potentially targeting 158.65, the low recorded on December 11. As traders await further economic developments, the EUR/JPY remains a focal point for market activity.
