EUR/JPY Price Forecast: Key upside barrier emerges near 166.50

• EUR/JPY strengthens to near 166.50 in Monday's early European session. 
• The positive view of the pair prevails above the key 100-day EMA with the bullish RSI indicator. 
• The key resistance level emerges in the 166.90-167.00 zone; the first support level to watch is 164.95.

The EUR/JPY cross extends its upside to around 166.50 during the early European trading hours on Monday. A generally positive tone around the equity markets weighs on the safe-haven currency like the Japanese Yen (JPY). However, the escalating geopolitical tensions in the Middle East might cap the upside for the cross. 

All eyes will be on the Bank of Japan (BoJ) interest rate decision on Tuesday, which is widely expected to hold its benchmark rate steady at 0.5% at the June meeting. 

Technically, the constructive outlook of EUR/JPY remains in place as the cross is well-supported above the key 100-day Exponential Moving Average (EMA) on the daily chart. The upward momentum is reinforced by the Relative Strength Index (RSI), which stands above the midline near 67.75, displaying bullish momentum in the near term. 

The crucial resistance level for the cross emerges in the 166.90-167.00 zone, representing the upper boundary of the Bollinger Band and psychological level. A decisive break above this level could see a rally to 170.75, the high of May 31, 2024. Further north, the next hurdle to watch is 171.60, the high of April 29, 2024. 

In the bearish case, the low of June 13 at 164.95 acts as an initial support level for EUR/JPY. A breach of this level could drag the cross toward 162.90, the low of June 5. The additional downside filter to watch is located at 162.60, the 100-day EMA.

EUR/JPY daily chart