- EUR/JPY edges lower to 158.45 in Thursday’s early European session, losing 0.27% on the day.
- The negative view of the cross remains intact below the 100-period EMA with a bearish RSI indicator.
- The first downside target to watch is 158.00; the key upside barrier emerges at 160.00.
The EUR/JPY cross extends its decline to around 158.45 during the early European session on Thursday. Recent hawkish remarks from some Bank of Japan (BoJ) officials bolstered the odds of a Japanese interest rate hike in March, supporting the Japanese Yen (JPY). BoJ Board Member, Tamura Naoki, said on Thursday that the central bank must raise interest rates to at least 1% by the second half of the fiscal year beginning in April.
According to the 4-hour chart, EUR/JPY remains capped under the key 100-period Exponential Moving Averages (EMA), suggesting that the path of least resistance is to the downside. The downward momentum is reinforced by the Relative Strength Index (RSI), which stands below the midline near 38.00, supporting the sellers in the near term.
The lower limit of the Bollinger Band and round mark at 158.00 act as an initial support level for the cross. A breach of this level could see a drop to 156.18, the low of December 3, 2024. Further south, the next contention level to watch is 155.15, the low of September 16, 2024.
On the other hand, the crucial resistance level emerges at the 160.00 psychological level. The additional upside filter to watch is 160.80, the upper boundary of the Bollinger Band, en route to 161.00, the 100-period EMA.
EUR/JPY 4-hour chart
