EUR/JPY is trading stronger near 169.75 in the early European session on Thursday, marking a 0.22% gain for the day. The currency pair is holding above the key 100-period EMA with a bullish RSI indicator, indicating a positive stance.
The first resistance level is at the psychological mark of 170.00, while initial support lies at 169.32. The uncertainty surrounding the Bank of Japan’s potential reduction in monthly government bond purchases, coupled with a weaker economy, is weighing on the Japanese Yen and supporting EUR/JPY.
Looking at the 4-hour chart, EUR/JPY remains bullish above the 100-period EMA, with the RSI in bullish territory around 58.0. A clear break above 169.75 could push the pair towards 170.00 and then 170.85, with further upside potential towards 171.60.
On the downside, a breach of 169.32 could lead to a decline towards 168.75 and eventually 168.40. Market participants are eagerly awaiting the Bank of Japan’s monetary policy meeting on Friday, which is expected to maintain interest rates unchanged.