EUR/JPY Price Forecast: Slides to 162.00 area; seems vulnerable ahead of ECB on Thursday

• EUR/JPY drifts lower on Wednesday amid the emergence of some JPY buying.
• BoJ rate hike bets and trade war fears continue to underpin the safe-haven JPY.
• The technical setup favors bears and supports prospects for a further downfall. 

The EUR/JPY cross struggles to capitalize on the overnight bounce from the vicinity of mid-161.00s and attracts some intraday sellers during the Asian session on Wednesday. Spot prices slide back closer to the 162.00 round figure in the last hour and seem vulnerable to weaken further amid the emergence of some buying around the Japanese Yen (JPY).

Despite a generally positive tone around the equity markets, expectations that the Bank of Japan (BoJ) will hike interest rates further this year continue to underpin the JPY. Apart from this, persistent worries about the potential economic fallout from US President Donald Trump's trade policies further benefit the JPY's relative safe-haven status and further contribute to capping the upside for the EUR/JPY cross. 

From a technical perspective, the recent repeated failures near the 164.70-164.80 region, which coincides with the 200-day Simple Moving Average (SMA), constitute the formation of multiple tops on the daily chart. That said, neutral oscillators on the daily chart warrant caution before placing bearish bets around the EUR/JPY cross ahead of the European Central Bank (ECB) meeting on Thursday. 

In the meantime, the 161.55-161.50 ara, or the weekly low touched on Monday, might continue to offer some support ahead of the 161.00 round figure. Some follow-through selling will reaffirm the negative bias and make the EUR/JPY cross vulnerable to accelerate the fall towards the 160.60 intermediate support en route to the 160.00 psychological mark and the 159.70-159.65 area, or the monthly trough.

On the flip side, the overnight swing high, around the 162.70 area, could act as an immediate hurdle ahead of the 163.00 mark. A sustained strength beyond the latter could trigger a short-covering rally towards the 163.65-163.70 horizontal resistance before the EUR/JPY cross aims to reclaim the 164.00 mark. The momentum could extend further towards testing the 200-day SMA pivotal resistance, around the 164.50 area.

EUR/JPY daily chart