• EUR/JPY extends its upside and holds above the 156.30 mark on Wednesday.
• The cross will meet the immediate resistance level of 156.90 with an eye on the 158.00 area.
• 155.85 acts as an initial support level for EUR/JPY.

The EUR/JPY pair gains traction after bouncing off Monday’s low around 155.00. The pair currently trades around 156.40 heading into Tuesday’s European session. Bank of Japan (BoJ) Governor Kazuo Ueda is expected to maintain the easy-money policy, even though market participants expected and exited ultra-low interest rates and moderated the Yield Curve Control (YCC) policy. This, in turn, leads to the weakening of the Japanese Yen against its major rivals due to monetary policy divergences.

It’s worth noting that the cross stands above the 100- and 200-hour Exponential Moving Averages (EMA), which means further upside looks favorable.

According to the four-hour chart, the cross will meet the immediate resistance level of 156.90 (High of June 22). The 158.00 area appears to be a tough nut to crack for EUR/JPY. The mentioned level represents a psychological round mark, and Year-to-date (YTD) high. Any meaningful follow-through buying will see a rally to the next round figure hurdle at 159.00 and 160.00. 

On the downside, 155.85 acts as an initial support level, highlighting the High of July 6. The additional downside filter to watch is 155.55 (100-day EMA), followed by 154.40 (200-day EMA).

The Relative Strength Index (RSI) stands above 60, indicating bullish territory and suggesting that the path of least resistance for the EUR/JPY cross is to the upside.

EUR/JPY four-hour chart