EUR/JPY Price Forecast: Extends the rally to near 161.00 amid overbought condition

• EUR/JPY extends its upside around 161.00 in Thursday's Asian session.
• The positive bias of the cross prevails above the 100-period EMA, but the overbought RSI condition might cap its upside. 
• The immediate resistance level emerges at 161.50; the first downside target to watch is 159.62. 

The EUR/JPY cross trades in positive territory for the fourth consecutive day near 161.00 during the Asian session on Thursday. The Japanese Yen (JPY) weakens amid the concern that US President Donald Trump's no-exemption taxes on commodity imports could jeopardize Japan's economic recovery.

According to the 4-hour chart, the constructive outlook of EUR/JPY remains intact as the pair holds above the key 100-period Exponential Moving Averages (EMA). However, the 14-day Relative Strength Index (RSI) stands above the midline near 73.35, indicating the overbought RSI condition. This suggests that further consolidation cannot be ruled out before positioning for any near-term EUR/JPY appreciation.

The upper boundary of the Bollinger Band at 161.50 acts as an immediate resistance level for the pair. A decisive break above this level could see a rally to 162.70, the high of January 28, en route to 163.22, the high of January 22. 

On the flip side, the initial support level is located at 159.62, the 100-period EMA. A breach of this level could expose 158.00, representing the psychological level and the high of February 7. Further south, the contention level to watch is 156.26, the low of February 11.  

EUR/JPY 4-hour chart