EUR/JPY Price Forecast: Trades below 166.00 after pulling back from eight-month highs

• EUR/JPY may find primary resistance at the eight-month high of 166.43
• The 14-day RSI remains above the 50 level, indicating the prevailing bullish bias.
• The nine-day EMA at 164.92 appears as the initial support.

EUR/JPY halts its five-day winning streak, trading around 165.80 during the Asian hours on Thursday. The strengthening of a bullish bias appears as the currency cross moves upwards within an ascending channel pattern, suggested by the technical analysis of the daily chart.

However, the EUR/JPY cross rises above the nine-day Exponential Moving Average (EMA), signaling short-term momentum is stronger. Additionally, the 14-day Relative Strength Index (RSI) is positioned above the 50 mark, suggesting a persistent bullish bias. A break above the 70 mark would indicate an overbought situation and a potential downward correction sooner.

On the upside, the EUR/JPY cross may target an eight-month high of 166.43, which was recorded on June 11, followed by the upper boundary of the ascending channel around 167.50.

The EUR/JPY cross could encounter initial support at the nine-day EMA of 164.92, followed by the 50-day EMA at 163.18. 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 ascending channel's lower boundary around 162.10. Further support appears at the nine-week low at 160.98.

EUR/JPY: Daily Chart