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EUR/JPY strengthens to around 171.65 in early European trading on Friday.
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The pair retains a positive outlook above the 100-day EMA, though overbought RSI levels may limit further gains.
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Immediate resistance is seen at 172.00, while initial support lies near 170.00.
The EUR/JPY cross extends its gains to around 171.65 in early European trading on Friday. The Japanese Yen (JPY) weakens slightly as investors dial back expectations of a Bank of Japan (BoJ) rate hike this year, amid rising concerns over the economic impact of heightened U.S. tariffs.
From a technical perspective, EUR/JPY maintains a bullish tone on the daily chart, with the price holding firmly above the 100-day Exponential Moving Average (EMA). However, the 14-day Relative Strength Index (RSI) hovers above 70.50, signaling overbought conditions. This points to a potential pause or minor pullback before the pair resumes any further upward movement.
Upside levels to watch include immediate resistance at 172.00 — a psychological barrier and the July 8 high. A breakout above this could drive the pair toward 172.53, aligning with the upper edge of the Bollinger Band, followed by 174.52, the July 3 peak.
On the downside, initial support rests at the 170.00 handle. A clear break below this could lead to further losses toward 169.04 (July 2 low), with additional downside risk extending to 168.10, the low from June 25.
While the broader trend remains positive, traders should monitor for potential consolidation or corrective dips in the short term, given the overstretched RSI.
EUR/JPY daily chart
