EUR/JPY Gains Rounds approaching 155.61

Highlights:

• The EUR/JPY rose to the 155.61 level on Wednesday.
• The cross remains bearish below the key EMA, while the RSI is below the 50 line.
• The first upside barrier is expected at 156.38, with 155.05 acting as a first support level for the EUR/JPY.

The EUR/JPY exchange rate recovered some of its losses from the mid-155.00s in early European trading on Wednesday. However, the upside may be restrained as investors expect the BOJ to start scaling back its ultra-lax monetary policy in 2024. The exchange rate is currently at 155.61, up 0.16%.

The outlook for the exchange rate remains negative as it continues to hold below the 100- and 50-hour EMAs on the four-hour chart. The 14-day RSI, which is below 50, indicates that the downside trend is likely to continue.

The first major resistance level that the exchange rate is likely to encounter is the 50-hour EMA at 156.38. A break above this area will pave the way for a rally to the next resistance zone at 156.90-157.00. The next hurdle is likely to be reached at 157.73 on December 20.

The Bollinger Band’s lower limit is a support level for the EUR/JPY. A break below this level could lead to a test of the December 14 low at 153.85 and the December 7 low at 153.16, which is the next downside target.