EUR/JPY Price Forecast: Breaks below 163.50, support appears near nine-day EMA

• EUR/JPY could target a six-month high of 165.21 once it returns to the ascending channel.
• The 14-day RSI moves above the 50 level, indicating that bullish bias is still in play.
• The immediate support appears at the nine-day EMA of 163.01.

EUR/JPY halts its two-day winning streak, trading around 163.30 during the Asian hours on Wednesday. The weakening of a bullish bias appears as the currency cross remains slightly below the lower boundary of the ascending channel, as suggested by the technical analysis of the daily chart.

However, the EUR/JPY cross maintains its position slightly above the nine-day Exponential Moving Average (EMA), signaling short-term momentum is stronger. Additionally, the 14-day Relative Strength Index (RSI) has also moved above the 50 level, suggesting the presence of a bullish bias.

On the upside, a return to the ascending channel could reinforce the bullish bias and support the pair to target a six-month high of 165.21, which was reached on May 13, followed by the next significant obstacle at 166.69, which marks a nine-month high last seen in October 2024. Further upside would reinforce the bullish sentiment and open the door for the EUR/JPY cross to explore the area around the channel's upper boundary.

The EUR/JPY cross could encounter immediate support at the nine-day EMA of 163.01, followed by the 50-day EMA at 162.39. A decisive break below these levels would weaken the short- and medium-term price momentum and put downward pressure on the currency cross to test the seven-week low at 160.98. Next support appears at the two-month low at 158.30, which was recorded on April 7.

EUR/JPY: Daily Chart