EUR/JPY Pulls Back Below 166.00 After Hitting Eight-Month High

EUR/JPY Price Outlook: Pulls Back Below 166.00 After Eight-Month High

The EUR/JPY currency pair is trading around 165.80 in early Thursday Asian trading, after retreating from its eight-month high of 166.43 reached on June 11. The pair ended a five-day winning streak but continues to trade with a bullish bias, as technical indicators remain supportive.

Technical Setup Favors the Bulls

• The 14-day Relative Strength Index (RSI) remains above 50, signaling continued upward momentum.
• The pair is also trading above the 9-day Exponential Moving Average (EMA), which currently sits at 164.92, offering initial support.
• The price action is contained within an ascending channel, indicating a sustained upward trend.

Although the RSI is below the overbought threshold of 70, a potential break above could indicate stretched momentum and signal a short-term pullback.

Key Resistance and Support Levels

• Immediate resistance is located at the recent 166.43 high, a level that capped gains earlier this week.
• A breakout above this level would open the door to the upper boundary of the ascending channel near 167.50.
• On the downside, support lies at the nine-day EMA (164.92), followed by channel support near 164.20.

EUR/JPY Trend Summary

IndicatorStatus14-day RSIAbove 50 (bullish)9-day EMASupport at 164.92Key Resistance166.43 / 167.50Channel SupportAround 164.20

What to Watch Next

Traders should monitor how the pair reacts to resistance at 166.43 and if it can maintain support above 164.92. A clear break above the upper band may reinforce the bullish continuation, while a dip below EMA support could signal a short-term consolidation.

Further Reading on Tredu.com

• Understanding RSI and Its Trading Signals
• EMA in Forex: Why It Matters
• How to Trade Ascending Channels in Forex