EUR/JPY Price Forecast: Tests ascending channel's lower boundary around 162.50

• The EUR/JPY cross tests the lower boundary of the ascending channel, suggesting a potential for weakening bullish bias.
• The bearish outlook seems possible as the 14-day RSI remains below the 50 mark.
• The primary barrier appears at the nine-day EMA at 161.31 level.

EUR/JPY trades higher for the second successive day, hovering around 162.70 during Monday's Asian trading session. Technical analysis of the daily chart indicates that the currency cross testing the lower boundary of the ascending channel, suggesting a potential for weakening bullish bias.

Additionally, the 14-day Relative Strength Index (RSI) remains below the 50 mark, indicating a potential bearish outlook for the EUR/JPY cross. Moreover, the currency cross's position below the nine- and 14-day Exponential Moving Averages (EMAs) highlights weakened short-term price momentum and supports the potential for further declines.

In terms of support, the EUR/JPY cross tests the ascending channel's lower boundary at 160.50 level. A break below this channel would strengthen the bearish bias and put pressure on the currency cross to navigate the region around its four-month low of 156.18, recorded on December 3.

On the upside, the EUR/JPY cross may find its primary resistance at the nine-day EMA at 161.31 level, followed by the 14-day EMA at 161.64 level. A break above these levels would improve the short-term price momentum and support the currency cross to approach its two-month high at the 164.90 level.

A further resistance zone appears around its six-month high of 166.69, a level last seen in October 2024, followed by the psychological level at 167.00, aligned with the upper boundary of the ascending channel.

EUR/JPY: Daily Chart