EUR/JPY is showing some positive movement in early European trading on Wednesday, currently trading around 169.30, marking a 0.50% increase for the day. The overall outlook for the cross remains negative as it stays below the 100-period Exponential Moving Average (EMA) on the four-hour chart, with the Relative Strength Index (RSI) indicating a bearish trend near 44.00.
Traders are keeping a close eye on the upcoming European Central Bank (ECB) interest rate decision on Thursday, with expectations leaning towards a 25 basis points rate cut. The key resistance level to watch for is at 170.00, while initial support is seen at 168.15.
If EUR/JPY manages to break above the 100-period EMA at 169.35, it could see a further push towards the psychological level of 170.00, potentially reaching a high of 170.72 and even testing the upper boundary of the Bollinger Band at 171.43. On the downside, breaking below the lower limit of the Bollinger Band at 168.15 could lead to a decline towards the May 16 low of 167.33, with further support at the May 7 low of 165.64.
Overall, the technical indicators suggest a continuation of the bearish trend for EUR/JPY, with potential for both upside and downside movements depending on key levels being breached.